The prompt month February natural gas contract logged another percent of gains today, settling easily off the highs after a decent gap up last evening but still finding support mid-morning after a heavy wave of selling. 

The main story of the day, however, was the widely varying movement in contract prices along the front of the natural gas strip, with the February contract logging decent gains but the March contract actually settling a bit lower and the rest of the strip being about flat. 

The result is that the G/H spread has continued its extremely impressive rally, moving out to around 30 cents now. 

In our Morning Update we showed just how impressive this February rally is compared to other contracts at the front of the natural gas strip. 

This comes as the natural gas market weighs conflicting signals between warmer trends in the short-term and colder trends in the long-term. This is exactly what we predicted in our Pre-Close Update to clients on Friday. 

Then in our Note of the Day today we highlighted this trend again as well. 

This all fits with our Note of the Day from last Tuesday, which predicted that forecasts through the end of January would continue to trend warmer but by February we would begin to see colder risks, which the natural gas market clearly reacted to today. 

Now, we are working to determine just how intense any February cold will be, and how long it should last. We expect this to play a major role in short-term natural gas price fluctuations at the front of the strip over the next few weeks, as will what is expected to be a large storage withdrawal to be announced Thursday.