Natural Gas Rug Pull

The natural gas market has a beautiful way of pulling the rug underneath whichever camp it pleases. For the bulls, the price surge yesterday following the TTF gas price spike seems to be the start of something new. But the excitement didn't last long as EIA reported +29 Bcf, which was higher than expectations. This was 4 Bcf higher than our projected +25 Bcf balance.

Looking at our forward projections, the market flips back into neutral following a period of deficit. The deficit we saw was not enough to eliminate the surplus in storage, and without the decrease, the upside to natural gas will be capped until wintertime.

So from now to withdrawal season (early November), you will from time to time see a spike in natural gas just to keep the bears at bay. But the reality is that there's no fundamental market force that will sustainably move prices higher.