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Daily Market Update November 1, 2018

Early Morning Update

The Dec18 natural gas contract is trading up $0.04 at $3.30. The Dec18 crude contract is down $0.26 at $65.05.

 

Summary

Despite a warmer-than-average weather outlook, the December NYMEX natural gas futures contract rose 7.4 cents and settled at $3.261/MMBtu Wednesday, likely because the market is still indecisive about winter demand as storage stocks sit well below the five-year average. Over the last five years, there were only two injection weeks in the month of November, yet we could see this injection season extend an extra week with moderate temperatures expected. Production continues to set new records, with Tuesday setting a new record at 85.33 Bcf/d.  While production continues to surpass historic values, overall demand increases could overshadow future record production levels. Capacity for LNG exports is scheduled to more than double between now and the end of next year, as the switch from coal to gas-fired power generation trends globally, as well as in the U.S.  Single-handedly boosting U.S. to Mexico pipeline capacity by 50%, the Valley Crossing pipeline alone will add 2.6 Bcf/d of new gas demand in 2019.  Calendar strip 2019 has recently gained 2.9 cents to settle at $2.843, and will continue to fluctuate as these supply and demand factors actualize next year. 

 

Market Update 110118

Market Settles 103118

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