Daily Market Update January 11, 2018

Early Morning Update

The Feb18 natural gas contract is trading up $0.11 at $3.02.  The Feb18 crude contract is up $0.33 at $63.90.

Summary

Natural gas trading on Wednesday was mixed, with the prompt month contract gaining a few cents in the morning before drifting lower throughout the remainder of the day and ultimately settling down almost two cents at $2.906.  After the extreme cold snap that sent temperatures plummeting across much of the U.S. over the last several weeks, temperatures have started to moderate, bringing some relief to the northern tier.  While conditions are forecast to remain above normal this week, cold is expected to return in the 6-10 day outlook.  Weather forecasts have been mixed for the 8-14 day period, with most vendors leaning above normal.  The market is expecting a record withdrawal from storage when the EIA releases this week’s storage number for the week ending Jan 5th.  Estimates for this week’s pull are centering around 345 Bcf, which would far exceed the current record of ~285 Bcf.  The US experienced record setting demand on January 1st, with total demand reaching 150.7 Bcf/d.  The EIA attributed the record demand, in large part, to increases in exports, increased reliance on gas for power generation, and industrial demand.  Res/Com demand, while high, did not surpass previous records.

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