Say hello to the March front-month contract, currently sitting at $3.05 US/mm after selling off about 12 cents. Quite the difference compared to where February was trading at only a few days ago.
The recent cold snap is over, and temperatures are returning to near normal. The first week of February is expected to have above-normal temperatures for most of the US population, and the week after is looking a bit below normal. Whether blocking will occur in February or March is difficult to predict, but know that NOAA still has an active La Nina advisory: La Niña conditions are present and are expected to persist through February-April 2025 (59% chance), with a transition to ENSO-neutral likely during March-May 2025 (60% chance).
Lastly, the storage report came in at a withdrawal of -321 Bcf, the largest since last year’s cold snap. For the week ending January 19, 2024, we withdrew -326 Bcf from storage. This was a result both from heating demand, but more importantly also due to production cuts from freeze-offs. Current daily production has returned to the same levels as December; the freeze-offs were not as severe as last January’s cold snap or as forecasted a month ago. Look for production to continue to improve as prices rise.
