Market Updates

Daily Market Update December 12, 2016

Daily market update

Early Morning Update

The Jan17 natural gas contract is trading down $0.16 at $3.59!  The Jan17 crude contract is up $2.40 at $53.90.

Summary

Winter has finally arrived and will be making itself comfortable over the next two weeks.  It comes as no surprise that, once again, below-average temperatures in the major Northeastern and Midwestern load-zones have been the driving force behind increased commercial and residential gas demand.  Healthy storage levels have luckily been able to moderate the strength of the January delivery gas contract, which is up 39% in the last month and settled at a two-year-high of $3.75/MMBtu on Friday.  Market participants seem to be nervous about the potential for $4 gas next year and beyond as production in the Marcellus, which contributes about 50% of domestic supply, is flat and rig activity in the region has stagnated.  However, this concern does not seem obvious, as the longer term gas calendar strip prices have been idle.  The bulk of trading has been focused on the stage-setting near-term activity, as short positions are being diminished rapidly.

Market Update 121216

Market Settles 120916

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