It's been quite the back-and-forth in the natural gas market this week, with colder short-term trends and tightening balances helping prices bounce early but warmer trends later in the month keeping prices in check. With some warmer overnight trends, the January natural gas contract settled down over 3% on the day for its lowest settle of the week. 

Losses were largest at the front of the strip, a sign that weather was a key driver today. 

Our subscribers were prepared, as in our Afternoon Update yesterday we shifted our natural gas sentiment to "Slightly Bearish" citing long-range warm risks and technical signals that were flashing more bearish risks. 

This was reiterated in our Morning Update where we highlighted that $4.25 was "back in play" off long-range warmth, with European model guidance losing a solid number of GWDDs overnight. Prices got within 2 cents of that level, eventually bouncing on some colder afternoon guidance. 

The Climate Prediction Center picked up on some of these warm risks in their long-range forecasts this afternoon. 

Colder trends in the Southeast on afternoon American GEFS guidance helped give prices a bid later in the day though (images courtesy of Tropical Tidbits). 

Now, traders are gearing up for tomorrow's EIA print while also trying to guess how weather model guidance will shift over the weekend. In our Note of the Day for clients today we took a deeper look at climate guidance, including American CFSv2 and Japanese modeling. We noted the continued warm bias on the CFSv2 model, but we also saw it finally trend colder for January in its most recent run, a trend that should continue on its output tomorrow too.