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Weekly Energy Market Update July 21, 2014

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Below is the Direct Energy Business Weekly Energy Market Update video for July 21, 2014. We embedded this video right into the blog post, so you don’t have to leave this page to view it. The written summary is still below too.

The following is a summary of last week’s market activity and the market outlook.

Market declines continued last week as NYMEX near-term futures fell to their lowest levels since January.

Very bearish fundamentals, including a lack of significant summer heat, record production, and a string of very large storage injections, have pushed natural gas prices for the prompt month (August), the 12-month strip, and calendar 2015 below $4.00.

The EIA reported a weekly storage injection of 107 Bcf, which decisively beat expectations of 100 Bcf. Nine out of the past 10 weekly storage injections have been 100 Bcf or more, which are extremely high for this time of year.

Current weather forecasts support ongoing large injections, with the next two injections projected to be in the 90s.

Although deficits to last year and the five-year average are expected to remain at the end of the injection season, strong injections have improved the outlook for storage inventories going into the winter, and the market appears to be less concerned on whether we’ll have enough gas to get through the winter.

Regional winter natural gas bases have also declined. Winter power prices continue to be driven by regional gas bases.

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Posted: July 21, 2014