Daily Market Update February 1, 2017
Early Morning Update
The Mar17 natural gas contract is trading up $0.07 at $3.19. The Mar17 crude contract is up $0.52 at $53.33.
Summary
In its second day of prompt month trading, the Mar17 settled at $3.117/MMBtu, down 11.5 cents on the day. Weather forecasts for the next 15 days have diminished expectations for strong heating related demand into at least the third week of February and the Mar17 contract responded by losing 8.1% in two sessions. January dry gas production in the United States averaged 3% or 2.48 Bcf/day lower year-over-year; however, average total gas demand in the United States was lower by 6% or nearly 6 Bcf/day compared to January 2016. With January 2017 recorded as the 6th warmest on record going back to 1950 resulting in a 10.7% loss of heating demand year-over-year in the United States, traders are beginning to turn their focus to spring.
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