Daily Market Update August 1, 2018
Early Morning Update
The Sep18 natural gas contract is trading down $0.01 at $2.77. The Sep18 crude contract is down $1.11 at $67.65.
Summary
As U.S. dry production hit a fresh all-time high yesterday, warmer-than-normal weather outlooks failed to push natural gas prices higher, with the September ’18 NYMEX contract settling at $2.782/MMBtu, down 1.5 cents. After reaching a record 81.5 Bcf/d on Monday, production continued to climb on Tuesday, reaching a new high of 81.9 Bcf/d. Strong production appears to be keeping a lid on gas prices, with the prompt month remaining relatively stable amid other bullish fundamentals. Despite some temperature relief in the West, forecasts show the rest of the country heating up over the next two weeks, with exceptionally hot weather in the Northeast, across the Great Lakes, and into the Midcontinent region. The hot weather had led to record-breaking power burns in July, yet, still, the prompt month has been unable to remain above $3.00 for any significant length of time since January. More recently, the natural gas front contract has been rangebound between $2.70 and $3.00, unable to show a distinct inclination.
Market Settles 073118