Daily Market Update September 22, 2017

Early Morning Update

The Oct17 natural gas contract is flat at $2.95.  Nov17 crude is down $0.18 at $50.37.

Summary

The NG market saw a sharp sell-off yesterday for the front 12 months as the EIA reported a larger-than-expected build into storage of 97 Bcf.  That build has caused a small upward revision in end-of-season storage figures, now at 3.83 Tcf.  We’re still expecting a deficit to the 5-year average but that deficit has been shrinking as demand has been low and production continues to increase.  The latest production data shows the daily rate at 74.6 Bcf, a new all-time high.
We are seeing a bit of late summer heat in the eastern half of the country.  This is causing some higher real-time pricing, notable in Ohio where the on-peak RT average was near $200.  ComEd pricing cleared $134 and eastern PJM was near $100.  In some cases, these were the highest RT prices all year, caused by a combination of high heat and generator outages due to maintenance.  Looking ahead, we’re expecting high heat through early next week so the potential for elevated prices will remain for a few more days.

Market Update 092217