- Currently, we expect the EIA to report a draw of 184 bcf this week (a final estimate will be released on Wednesday).
- If the latest weather forecast remains unchanged, total natural gas demand should rise by as much as 19.8 bcf/d y-o-y (on average) over the next two weeks.
- Price spikes above $3.100 and even higher are still possible as the short-range weather forecast remains bullish (in absolute terms) + our storage level outlook is bullish.
- Therefore, we have a simple choice: we can either place a bet on a probable spike in price and go long (March or April contract) or we can wait for a price to spike and then short it.
- The ultimate choice will depend on your attitude towards risk. However, we think that shorting the spike is safer.
For further details see:
Natural Gas Trading: We Have A Simple Choice