Daily Market Update January 5, 2017
Early Morning Update
The Feb17 natural gas contract is trading up $0.02 at $3.29. The Feb17 crude contract is up $0.34 at $53.60.
Summary
For the fourth straight session, natural gas prices continued their tumble, spurred on by warmer-than-expected weather outlooks. Prompt month prices had spiked to $2.93/MMBtu, a two-year high, at the end of December when extremely cold temperatures were forecast to begin this week, but have since fallen 17% when those same forecast were revised to show warmer-than-normal temperatures covering about three-fourths of the country. On Wednesday, the Feb17 natural gas contract settled at $3.267/MMBtu, down another six cents for the day. The U.S. Energy Information Administration will issue their weekly storage report this morning at 10:30. Estimates for the amount of gas withdrawn from storage facilities in the week to Dec. 30 range from 61 to 98 Bcf, with a consensus around 73 Bcf. Bentek is projecting a smaller pull at 66 Bcf, which compares to a 98 Bcf drop in stockpiles for the same week last year and a 107 Bcf five-year average withdrawal. Data from the National Oceanic and Atmospheric Administration for the week to Dec. 31 show the number of heating degree days to be equal to the HDDs for the same week last year, but about 23% less than normal.
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