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Daily Market Update January 23, 2017

Early Morning Update

The Feb17 natural gas contract is trading down $0.04 at $3.16.  The Feb17 crude contract is down $0.72 at $52.50.


January warmth continues to dominate bearish gas fundamentals, as the February delivery contract opened down two cents from Friday at $3.18/MMBtu.  This opening price represents an 18 cent decrease from Thursday’s $3.36 close, which ended last week’s short-lived rally rooted in forecasts that had been calling for colder February temperatures.  The associated decrease in heating demand will likely lead to weak storage withdrawals that could push inventories back to a relative surplus compared to the five-year average by the end of the month.  Despite a report released from Baker Hughes indicating that U.S. rig counts are the highest they’ve been in about a year, production is still about 2.4 Bcf/d lower year-over-year.  All summer and winter strips through 2020 are down anywhere from 2-14 cents day-over-day, pulling their respective calendar prices down with them.  ERCOT and CAISO experienced some volatility in the index markets over the weekend, while forwards remain at or near all-time lows.  On-peak 2018 and 2019 pricing in the eastern markets remains elevated.

Market Update 012317

Market Settles 012017

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