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Daily Market Update January 9, 2017

Early Morning Update

The Feb17 natural gas contract is trading down $0.08 at $3.21.  The Feb17 crude contract is down $1.09 at $52.90.

Summary

Despite frigid temperatures across most of the country, the February natural gas delivery contract is trading at $3.21, down eight cents from Friday’s close.  Today’s opening price represents an erosion of almost 20% over two weeks from the $3.90 that was marked on December 26th, 12% of said downturn occurring since January 1st.  It appears that short-term weather remains in the market fundamental spotlight, causing large sell-offs amongst managed money's speculative positions. The 20-day outlook shows a dramatic shift to much-above-normal temperatures in the major U.S. load zones, which should suppress residential heating demand.  Last week's weak storage withdrawal has only been mildly offset by flat-lining production, as 2019 - 2021 on-peak calendar strips are within 5% of all-time lows in each market.  Fear of 2018 Q1 winter volatility continues to trade at a premium in MISO, NYISO, NEPOOL, and PJM on-peak strips, preventing any  significant downturn for the calendar year prices.

Market Update 010917

Market Settles 010617

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