Daily Market Update January 30, 2017

Early Morning Update

The Mar17 natural gas contract is trading down $0.08 at $3.28. The Mar17 crude contract is up $0.08 at $53.25.

Summary

After spending most of the day on the negative side in its final day of trading on Friday, the Feb17 NYMEX natural gas contract eventually settled at $3.391/MMBtu, up 0.9 cent for the day, as traders closed the books on February and turned their attention toward March. The expired prompt month had risen every day this past week, leading to a weekly gain of 18.7 cents, or 5.8% week-over-week. March debuts as the prompt month today, and was more actively traded on Friday, settling at $3.358/MMBtu, down 3.9 cents day-over-day. All of the calendar strips were down, as well, with the 2022 and 2023 calendar strips setting all-time lows again. Weather continues to be the primary driver of natural gas prices, and has been pushing prices up and down as waves of cold, then warmer weather are forecast across the country. However, production continues to struggle just under 71 Bcf/d, and has been providing a bottom for prices lately. Year-to-date, U.S. dry production is lagging last year by 2.4 Bcf/d. With spending cuts in the drilling industry and 2017 production projections revised downward, it is unlikely traders will become too bearish anytime soon.

Market Update 013017

Market Settles 012717