1/23/25 Pre-report update

1/23/29 Mid week update
Pattern forcing issues. Due to favorable wind patterns in the high latitudes, high pressure over Alaska, and the return of the seventh elongated Polar vortex, there is a better than average chance there will be a return to the cold and storminess after a relaxation in the bitter cold next week. The snow cover will aid the atmosphere in keeping any moderation in air masses cooler that the models have projected the past few days. This needs to be understood that the relaxation is at a time when the Northern Hemisphere is at its coldest. So, this is a relaxation to a generally normal(cold) period. Not a warm up to well above average. We are in the second week of the coldest part of the North American heating season and even with a relaxation form normal, this will continue to draw normal to above normal amounts of NG from storage. Since mid November, we have had generally 15 days of cold and stormy followed by 15 days of dry and normal to a bit warmer. We are now finishing our second cold and stormy pattern heading into another 15 days of normal to a bit above. The synoptic models are again showing another 15 days of cold returning sometime around the 5th of February to keep the NG burning straight through March. This is important because as opposed to last year, we are not going to see below average draws, with producers overproducing NG and below average LNG production for the next month.
Storage is going to be the big impact going into the shoulder season and we are more than likely going to flip to below the 5-year average for storage tomorrow. The current industry projections are now indicating that we will exit the draw season close to 150 BCF below the 5-year average and over 500 BCF below last year. It is estimated that storage will come in at 1700 BCF or the eight lightest storage in the last 30 years. I do believe that pricing does have another possible 15% to the upside, but this will probably be the terminus for the withdrawal season. With a steady adjustment of pricing into the injection season to the $3 range. But unlike last year, I do not see any reason for historic low pricing to return. Producers have done a fantastic job at being disciplined.
I am still currently long on the March contract and will probably readjust my position after the report today. I am not planning on holding any position over the weekend. I am going to need to see the models continue verifying a bit more. But I will continue to trade the big daily moves, which I believe we can continue to expect for some time.