A major shift colder in long-range weather outlooks sparked a massive rebound in natural gas futures on Monday. With the double shot of polar air setting up sustained strong demand and potential production curtailments because of freeze-offs, the March Nymex gas futures contract jumped 28.6 cents to $2.850.
The so-called widowmaker spread, which mostly has traded in contango since December, moved into backwardation on Tuesday, indicating the market is not completely pricing out fears of a storage crunch this winter. The April contract settled at $2.821, up 22.9 cents from Friday’s close.