Market Updates

Daily Market Update - January 20, 2016

Daily market update

Early Morning Update

The Feb16 natural gas contract is trading up $0.01 at $2.10.  The Feb16 crude contract is down $0.69 at $27.77.

Summary

As mid-term weather outlooks forecast a warming trend, demand for natural gas is expected to soften later this month.  The market continues to look past the current cold snap and prices continue to slide.  The Feb16 NYMEX contract settled at $2.091/MMBtu yesterday, down 0.9 cent, the lowest price since Dec. 24.  After the holiday rally, gas prices have lost 15% in just over a week.  The market appears to be becoming rang-bound again.  A dip below $2.00/MMBtu lasted less than two weeks last month, and prices were unsustainable above $2.30/MMBtu recently.  It may take a significant change in fundamentals to push prices out of this range.  “Smart money” traders have reduced their net short position in natural gas over the past few weeks, which would normally signal a run-up in prices.  However, the short-covering reduces the chance of an overreaction to any new bullish news.  Total U.S. demand is projected to be 110.1 Bcf/d today, a drop of 7.3 Bcf/d from yesterday due to rising temperatures in major demand regions which should bridle consumption.

Market Update 012016

Market Settles 011916

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