Market Updates

Daily Market Update - August 19, 2016

Daily market update

Early Morning Update

The Sep16 natural gas contract is trading down $0.04 at $2.63.  The Sep16 crude contract is down $0.20 at $48.02.

Summary

Yesterday, the U.S. Energy Information Administration reported that natural gas stockpiles grew less than expected in the week to August 12, and the Sep16 NYMEX contract reacted accordingly.  The EIA’s data showed a weekly injection of 22 Bcf, which was near the low end of estimates (consensus = 26 Bcf), and less than half the 56 Bcf build seen last year for the same week, as well as the 57 Bcf five-year average.  The prompt month, which had seemed to be looking for direction the past few days, was relatively unchanged before the report’s release, but moved decidedly higher once the data came out at 10:30.  Sep16 natural gas futures traded as high as $2.697/MMBtu, before settling at $2.674/MMBtu, up 5.5 cents from the previous day.  The year-over-year surplus was cut to 327 Bcf (10.9%), while the surplus to the five-year average was trimmed to 405 Bcf (13.8%).  Surpluses are expected to continue to shrink in the coming weeks, as end-of-summer weather outlooks continue to support strong demand for gas in major cooling regions through early September.  The EIA is still projecting a 4,042 end-of season storage level, which would mark a new all-time high, but this is becoming more unlikely as hot weather lingers in the eastern U.S. and the Pacific Northwest.  Most analysts believe storage levels will reach 3.9-4.0 Tcf by the end of October, the titular end of the injection season.

Market Update 081916

Market Settles 081816

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