Daily Market Update December 18, 2017

Early Morning Update

The Jan18 natural gas contract is trading up $0.13 at $2.74.  The Jan18 crude contract is up $0.37 at $57.67.

Summary

On Friday, NYMEX natural gas futures price for January continued its downward trend, falling 7.2 cents to settle at $2.612/MMBtu. Over the last week, the prompt month has tumbled about 16 cents, even with the colder temperatures increasing the amount of natural gas needed for heating related demand. The EIA reported that this blast of cold seen throughout the country last week increased the overall U.S. consumption by 27%, the main contributor was the ResComm demand sector increase of 50%. Weather forecasts for the eastern half of the country are predicting short lived relief from colder-than-normal temperatures, before returning to much colder-than-normal temperatures for the 6-10 and 11-15 day forecasts.  The market is less liquid during the week of Christmas, this could mean a push either much higher or lower for pricing due to some covering of short positions for the upcoming year. On Saturday, U.S. production hit a new record level at 77.4 Bcf/d. Production remains at a healthy level to meet demand, and has been a contributor to the recent dip in prices for the beginning of 2018. 

Market Update 121817