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Daily Market Update July 5, 2017

Early Morning Update

The Aug17 natural gas contract is trading flat to Monday’s close at $2.95.  The Aug17 crude contract is down $0.67 at $46.40. 

 

Summary

The NYMEX NG prompt month traded 8.4 cents lower on Monday, as forecasters made slight bearish revisions to weather forecasts over the weekend. The Aug17 contract settled under the $3.00 support level at $2.951/MMBtu on Monday.  U.S. dry natural gas production has made a comeback for this first part of July, setting a new 2017 high of 72.437 Bcf/d over the holiday, and holding steady above 72 Bcf/d over the past 7 days. The Northeast/Midwest region is leading the growth in production with an almost 10% increase compared to the first part of July 2016. This fundamental change has had a significant impact on analysts’ expectations for the Energy Information Association’s upcoming Natural Gas Storage Reports. Before the weekend,  estimates for the storage report for week ending July 7, 2017 had centered around a 45 Bcf injection, but now analysts are estimating a build closer to 60 Bcf. Additionally, estimates for storage growth for the week ending July 14, 2017 have increased dramatically, from ~30 Bcf to ~50 Bcf. These increases should help put U.S. natural gas storage levels in a slightly better position heading into winter 2017/2018.

 

Market Update 070517

Market Settles 070317

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