Market Updates

Daily Market Update September 27, 2016

Daily market update

Early Morning Update

The Oct16 natural gas contract is trading up $0.01 at $3.01.  The Nov16 crude contract is down $1.18 at $44.75.

Summary

Natural gas prices reversed course again and headed back up toward $3 yesterday.  After one of the hottest summers ever that produced record-setting power burns, prolonged heat is keeping demand for natural gas elevated, even heading into the shoulder months when demand typically wanes.  With more reliance on natural gas for fuel as coal-fired generation  plants close, weather-normalized power sector demand is up 10% from a year ago.  Production has not been much help, averaging between 71-72 Bcf/d, down from the 74.4 Bcf/d all-time high set in February.  With two days left of trading, the Oct16 NYMEX contract rose 4.2 cents in this week’s opening session, settling Monday at $2.997/MMBtu.  The Nov16 contract was more actively traded yesterday, climbing 4.2 cents, as well, and settling at $3.055/MMBtu.  With a tightening supply/demand balance providing plenty of support for gas prices, an early switch to cold weather would all but evaporate the glut of natural gas the market has been experiencing, and could boost prices even higher.  The market is eagerly awaiting winter weather outlooks for an indication as to what direction natural gas prices may go.

Market Update 092716

Market Settles 092616

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