Market Updates

Daily Market Update - January 8, 2016

Daily market update

Early Morning Update

The Feb16 natural gas contract is trading up $0.02 at $2.40.  The Feb16 crude contract is up $0.38 to $33.65.

 

Summary

More volatility for the front of the curve as the NYMEX prompt NG contract traded higher by $.115 to close the day at $2.382.  A storage draw of –113 Bcf and a reclassification of 4 Bcf was much higher than most expectations led the rally, with the prompt contract finishing at its highest level in nearly two months.  The high draw reflected both the colder weather which led to higher heating-related demand and lower supply caused by wellhead freeze-offs.  NG production did dip to ~68 Bcf/d due to the disruptions but has since recovered back to nearly 72 Bcf/d.  Even though the draw was higher than expectations, the surplus to last year grew to 17.2% and 14.6% to the 5 year average.  Looking ahead, expectations call for a draw next week of ~180 Bcf, and nearly 160 Bcf the following week.  If true, the surplus to both benchmarks would again grow and would leave nearly 3.3 Tcf of gas in storage by mid January.  Estimates for end of season storage hover near 2.0 Tcf.

Market Update 010816

Market Settles 010716


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