Market Updates

Daily Market Update - February 2, 2016

Daily market update

Early Morning Update

The Mar16 natural gas contract is trading down $0.12 at $2.03.  The Mar16 crude contract is down another $1.42 at $30.20.

Summary

The 11.6 cent gain the Mar16 natural gas futures contract saw on Friday was all but erased yesterday, as the prompt month had its largest one-day loss in a month, settling at $2.152/MMBtu, down 14.6 cents.  It was the largest loss since Dec. 30 and put an end to an eight-session rally.  Because about half of the homes in the U.S. are heated by natural gas, weather is one of the key drivers for natural gas prices at this time of year.  Government weather models lowered their projections for heating degree days, which are used as a measure of weather-related demand for natural gas.  With most of the winter heating season behind us, the natural gas market is looking quite bearish, with an overall mild weather outlook for the balance of the season translating into lethargic demand for the heating fuel, which, in turn, would leave a very healthy supply of natural gas in storage at the end of the winter withdrawal season.  Although total U.S. dry production is down 0.4 Bcf/d today, it did reach its highest level so far this year yesterday at 73.0 Bcf/d, just 0.4 Bcf/d off the all-tine record set last April.  Northeast production hit a new all-time high on Monday of 22.83 Bcf/d.

Market Update 020216

Market Settles 020116

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