Natural Gas sold at $4.20/MMBtu on HH cash market Mar 4
Posted: Mon Mar 04, 2019 9:06 pm
Henry Hub spot market cash traded up to $4.20 this morning but futures only traded as high $2.888 and settled basically unchanged on the day.
BMO Commodity Markets Group: "Due to low storage inventories, operators are trying everything they can to keep gas in the ground unless cash premiums are very wide, leaving market participants to buy gas in the spot market. The futures market is viewing this as a short term phenomenon, but this much of a muted reaction is odd given end of March inventories are creeping down towards 1 Tcf, a level not seen since the Polar Vortex. Cal20 and out was somewhat supportive today despite there being continued selling interest in Cal20 at 2.75. The 21/22 spread gained about .005 of contango today, closing at .015. This is in line with the movement we have seen in 22/23 spread as of late, but stands in contrast to a large seller in the brokers of the jan22 vs the April 21, selling the Jan22 2,000x at .43 over the April 21. In options, April ATM vol was down .75% with the rest of the curve unchanged. There is interest in Cal20 to roll strikes around, mainly from 2.60 down to 2.20 or from 2.60 up to 2.85, but no real vol axe either way."
BMO Commodity Markets Group: "Due to low storage inventories, operators are trying everything they can to keep gas in the ground unless cash premiums are very wide, leaving market participants to buy gas in the spot market. The futures market is viewing this as a short term phenomenon, but this much of a muted reaction is odd given end of March inventories are creeping down towards 1 Tcf, a level not seen since the Polar Vortex. Cal20 and out was somewhat supportive today despite there being continued selling interest in Cal20 at 2.75. The 21/22 spread gained about .005 of contango today, closing at .015. This is in line with the movement we have seen in 22/23 spread as of late, but stands in contrast to a large seller in the brokers of the jan22 vs the April 21, selling the Jan22 2,000x at .43 over the April 21. In options, April ATM vol was down .75% with the rest of the curve unchanged. There is interest in Cal20 to roll strikes around, mainly from 2.60 down to 2.20 or from 2.60 up to 2.85, but no real vol axe either way."