Daily Market Update January 10, 2017
Early Morning Update
The Feb17 natural gas contract is trading up $0.12 at $3.22. The Feb17 crude contract is up $0.14 at $52.10.
Summary
As the nation moved closer to the end of a bitter cold front, the February prompt month sank another 18 cents on Monday to close at $3.098. The front month is down 21% since it began trading on December 28th, immediately after hitting a two year-high. The 12 month strip fell nearly 14 cents on the day as well, with outer years posting one to five cent losses. Weather forecasts are the principal dynamic in these fickle market movements, and we are now seeing widespread warmth across the country through the six-to-ten day forecast and beyond. Despite steadily falling production since December 30th, the sharp drop in demand accompanying warmer temperatures will slow the pace of natural gas storage withdrawals, and may even reverse the deficit to five-year average levels with this week’s report.
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