Daily Market Update November 7, 2018
Early Morning Update
The Dec18 natural gas contract is trading down $0.03 at $3.52. The Dec18 crude contract is up $0.44 at $62.65.
Summary
Reeling from Mondays 28.3 cent gain, the December 2018 prompt month lost 1.2 cents to settle at $3.555/MMBtu yesterday. While near-term weather outlooks, predicting below normal temperatures for the eastern 2/3 of the country, support natural gas winter prices, speculation underlying the market supposes Monday was too strong of a rally, and there could be downside to the recent highs. Despite these sentiments, due to weather outlooks, residential and commercial demand is expected to rise nearly 10 Bcf/d over the next seven days, pushing total U.S. gas demand to ~83 Bcf/d. With natural gas storage anticipated to be a 13-year low heading into this winter, production growth should help ease some of the supply and demand balance. However, NG production has not shown improvement since reaching a high of 85.5 Bcf on October 31.
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