March Madness is just around the corner and the natural gas bears appear to be shutting down any Hail Mary shots the bulls are taking to push this market higher. To close out the “typical” winter season term, the March contract expired at $2.627 per MMBtu, nearly 23% below the February contract. This was the first monthly settle below $3.00, since November 2016. The average NYMEX settlement for the first quarter of 2017 was $3.316 per MMBtu, 59% above the first quarter of 2016. The Nov16 – Mar17 strip price averaged $3.189 per MMBtu, nearly 52% above the previous winter strip. Winter seems to be disappearing quickly with the 8 – 14 day forecast showing above-normal temperatures covering much of the United States, with the exception of the Pacific Northwest. Natural gas storage has already experienced its first injection this season, as the last full week of February experienced a build of 7 Bcf. This puts the current storage level 7.3% below last year’s level at this time and 14.3% above the five-year average. The April contract is now trading in the prompt position and in its first day, the contract dropped as low as $2.659 per MMBtu, but is currently trading at $2.789 per MMBtu.
