The upside January price risk baked into natural gas forwards at hubs along the populated coasts proved overdone as buyers locked in steep discounts during the post-Christmas trading period, NGI’s Forward Look data show.

While January fixed prices at benchmark Henry Hub rose 3.8 cents during the Dec. 22-29 trading period, numerous locations saw heavy selling pressure. This was most evident in the Northeast, where limited pipeline capacity tends to cause outsized price spikes during peak heating demand periods.

As traders prepared to close the book on 2021, the downward movement at hubs like Algonquin Citygate, where January basis tumbled $9.173/MMBtu from Dec. 22-29, suggested a marked decline in unease over any potential price blowouts to open 2022. 

Similarly, a $9.376...