Daily Market Update February 2, 2017
Early Morning Update
The Mar17 natural gas contract is trading down $0.04 at $3.13. The Mar17 crude contract is up $0.27 at $54.15.
Summary
In spite of overall bearish fundamentals, weather outlooks for the next two weeks did turn a bit cooler yesterday, which helped push up the Mar17 natural gas futures contract from a near two-month low. The prompt month gained 5.1 cents on Wednesday, settling at $3.168/MMBtu, after two consecutive days of considerable losses this week. Natural gas prices had risen month-over-month for the past five months, but that streak ended in January, when prices fell 16% due to a lack of significant cold weather. The March NYMEX contract has broken past key support levels since its debut as the prompt month, and may fall further with little fundamental support behind it. Market analysts expect natural gas storage levels to rebound back above the five-year average level when the U.S. Energy Information Administration releases storage data this morning for the week to January 27. Estimates for the weekly withdrawal range from 77 to 98 Bcf, with a consensus near 80 Bcf. This is less than half of the 169 Bcf pull seen last year for the same week, as well as the 166 Bcf five-year average.
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