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Daily Market Update January 24, 2018

Early Morning Update


The Feb18 natural gas contract is trading up $0.04 at $3.48.  The Feb18 crude contract is up $0.23 at $64.70.



Technical trading has created big swings recently in the near-term natural gas market. Trading Tuesday continued this trend, with the Feb18 contract adding 22 cents (7%) to finish the day at $3.444/MMBtu. The Mar18 contract also moved significantly higher, and the rest of 2018 increased five cents, on average. The last time the prompt month contract gained more than 22 cents in a single day was on 12/21/16, when the Jan17 contract settled at $3.542/MMBtu, 27.9 cents higher on the day. Interestingly, at that time, near-term weather outlooks were more bearish than current forecasts. However, gas demand was growing and evident in large withdrawals from storage. This year, demand for natural gas demand has also been strong. All gas demand sectors are higher so far this January, compared to January 2017, adding ~15 Bcf/d y-o-y. Yesterday’s trading indicates the market may be coming to grips with an estimated end-of-winter storage level of only 1.22 Tcf, the lowest level since the 2014 Polar Vortex, which left natural gas storage levels under 1.0 Tcf.



Market Update 012418 

Market Settles 012318

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