March’s weather forecast is getting warmer (Tuesday is expected to be 11 degrees Celsius and sunny in Toronto), and the NYMEX April front month contract sold off in the morning. Yesterday’s EIA storage report was a miss, and we are expecting smaller and smaller withdrawals out of storage as we move closer to Spring. This story makes sense… but then the market caught a bid and rallied in the afternoon.

Why? The big headline this afternoon was that Trump is now threatening Canada with Dairy and Lumber tariffs, and that Treasury Secretary Bessent called Trudeau a ‘numbskull’ and a ‘premier’. Honestly, how grade school. Regardless, the full weight of the tariffs have been put off until April 2^nd, except for the parts that are not (and the milk). Like we mentioned yesterday, the fundamentals don’t matter for now. But they will, we just don’t know when. 

Injection season this year will start with storage at a much lower level than last year, so we have some work to do this summer if we want to fill it. This is not out of reach as long as production grows to an average of 106 to 107 Bcf/day over the whole year. It takes a few months for a well to become operational, so we might not see output really grow until late May or June. But if they are drilling new wells, than that will really alter the picture.

The only other news story floating around is that there were a lot of financial shorts in natural gas, and the reason for the highs this week is that traders are running for the exits. This could be true and it would explain the rally, but the evidence is circumstantial.

We hope everyone has a good weekend. Let’s all enjoy the warm weather coming up.