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Daily Market Update January 4, 2018

Early Morning Update

The Feb18 natural gas contract is trading up $0.01 at $3.02.  The Feb18 crude contract is up $0.05 at $61.68.



The Feb18 natural gas contract gave back some of its recent gains on Wednesday, settling at $3.008/MMBtu, down  4.8 cents day-over-day. Weather forecasts are predicting Winter Storm Grayson to bring on a “bomb cyclone”, an event in which atmospheric pressure drops 24 millibars in 24 hours or less, and to dump snow all along the Eastern Seaboard, from Florida to Maine. Natural gas production has been slumping due to wellhead freeze-offs caused by the icy temperatures, and generation in the Northeast has been relying on oil as fuel to meet the increased demand brought on by the cold snap.  So far this year, total demand for natural gas has averaged 3.5 Bcf/d higher than the single-day demand record set during the last polar vortex in January 2014.  Power burn is also at record levels, averaging 30 Bcf/d so far this year. While frigid temperatures are anticipated through the remainder of this week, some relief can be expected in the 6-10 day window. Meanwhile, the total of the next two storage withdrawals is projected to be twice as much (over 300 Bcf) as normal for this time of year.


Market Update 010418 

Market Settles 010318

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