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Daily Market Update January 26, 2017

Early Morning Update

The Feb17 natural gas contract is trading up $0.13 at $3.46.  The Feb17 crude contract is up $0.31 at $53.06.

 

Summary

Over the last several days, weather forecasts have indicated that the above-normal trend may give way to cooler temperatures during the second week of February.  The chance for cooler weather in the northern tier of the U.S helped push near-term natural gas prices higher on Wednesday, as the Feb17 NYMEX contract added 5.3 cents to close the session at $3.332/MMBtu.  Short-term fundamentals have been largely unchanged over the last several weeks.  With dry gas production flat at nearly 71 Bcf/day, and end-of-season storage projected to finish at the five-year average, price action has been closely linked to changes in weather forecasts and the likelihood of adding a surplus or deficit to the five-year average in the coming weeks.  Looking at the longer term strips, natural gas prices have converged between $2.88-$2.93 for calendars 2019-2023 despite projections that indicate growing demand from Mexico and the LNG export sector.  The 2023 calendar strip closed yesterday at an all-time low of $2.93.

Market Update 012617

Market Settles 012517

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