Natural Gas Volatility: Understanding Recent Changes

Friday, March 27th saw the front-month NYMEX Natural Gas contract open at $3.073, $0.074 above Thursday’s closing price $2.999. Experiencing notable volatility as markets opened, marking the intraday low of $2.983 ahead of 9:05AM, the contract stabilized near $3.050 by midday. Ascending to a high of $3.124 at 2:00PM, April settled higher on Friday at $3.095.

Ready to assume the prompt month position today, the May contract opened at $3.025 on Friday, $0.016 above Thursday’s closing price of $2.928. Recording the intraday low of $2.968 at 10:15AM, market sentiment was still leaning bullish amid ongoing uncertainty in the Middle East. Stabilizing near $3.000 through the early afternoon, prices rose to an intraday high of $3.055 at 2:00PM. May closed higher on Friday at $3.025.

The EIA Natural Gas Storage Report published last Thursday posted a 54 BCF withdrawal from storage for the week ended March 20 – above the market estimate of a 48 BCF injection. Total working gas in storage was reported as 1,829 BCF; 5.2% above this time last year and 0.8% above the five-year average.

As of 6:35AM this morning in Globex, WTI Crude was up $2.270; Natural Gas was down $0.080; Heating Oil was up $0.130; and Gasoline was up $0.046.

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