Daily Market Update February 15, 2018

Early Morning Update

The Mar18 natural gas contract is trading down $0.03 at $2.56.  The Mar18 crude contract is down $0.13 at $60.47.

Summary

Is winter over?  The market sure seems to think so.  The natural gas prompt month traded as high as  $3.25 at the end of January, but has slid 60 cents over the last two weeks.  Weather forecasts have turned milder across the East for the balance of February, allowing the bears to regain control of the market.  Prices have stabilized over the last three days, and closed the trading session on Wednesday at $2.587/MMBtu.  The 6-10 day and 8-14 day outlooks provided by the National Weather Service show a stark contrast between the West, much below normal, and the East, much above normal.   The market is expecting a withdrawal of 186 Bcf when the EIA releases their weekly storage report later this morning.  This figure would exceed the 5-year average withdrawal of 154 Bcf, but if the current weather forecasts come to fruition, withdrawals from storage over the next several weeks are expected to continue to fall below the 5-year average.  When combined with growing production, end-of-season storage estimates have been ticking higher over the past two weeks and now stand at 1.4 Tcf.

Market Update 021518