Despite yesterday’s significant storage withdrawal, buyers must be pleased to see NYMEX futures continue to fall another -3.3% over the next 12 months. Interestingly, the bulk of this move was not in the front month, but further out (especially March, April, and May), suggesting that the market is surer of the direction it has taken this past week. Dawn in particular is backwardated with today’s DDI price settling a few cents higher than Jan futures, and temperatures are expected to warm up to normal next week.

All that being said, it’s clear that this market is very reactive to change in temperature forecasts, and meteorologists have warned that models may have trouble predicting cold in the near-term. Be aware that sentiment can quickly flip, and don’t miss out on an opportunity. Have a good weekend! (FM)