Daily Market Update December 14, 2017

Early Morning Update

The Jan18 natural gas contract is trading down $0.03 at $2.69.  The Jan18 crude contract is down $0.45 at $56.15.

Summary

In just over a week, January natural gas futures lost 38 cents, or 13% of their value, and settled at a near 10-month low on Tuesday.  Amid oversold conditions and taking advantage of the recent losses, the market reversed itself yesterday with renewed buying and short-covering. The midweek trading session settled at $2.715/MMBtu, up 3.7 cents day-over-day. Colder weather forecasts also added support to Wednesday’s push higher. Total U.S. demand is projected to reach 108.3 Bcf/d today, the highest seen so far this season. Most of the increase in demand is coming from the Res/Comm sector, which has seen continued growth due to the first blast of winter fanning out across the Midcon, Midwest, and Rockies regions. The U.S. Energy Information Administration will release their weekly storage data at 10:30 this morning, with estimates in the neighborhood of a mid 60s withdrawal.  This is less than the 78 Bcf five-year average, and much smaller than the 132 Bcf pull from natural gas stockpiles seen last year for the same week.

Market Update 1214