Daily Market Update October 29, 2018
Early Morning Update
The Nov18 natural gas contract is trading down $0.07 at $3.11. The Dec18 crude contract is down $0.20 at $67.39.
Summary
On Friday, the November 2018 NYMEX natural gas futures price for the month fell slightly, down 1.7 cents on the day to settle at $3.185/MMBtu, after dropping as low as $3.102/MMBtu. November will expire today as the prompt month, moving the markets focus to December pricing. The slight dip on Friday was following a somewhat larger than expected injection reported by the EIA last week of 58 Bcf. However, the storage deficit still remains at record low levels, 17% below the 5 year average. Most of the cooler-than-normal weather temperatures for the eastern half of the country are shifting to more normal to slightly above normal temps, with continued warmer weather on the west coast compared to the 30 year normal. Any shift to the cooler side, could quickly cause a price spike to winter pricing as the market appears to be highly weather sensitive. Demand for Natural Gas via LNG exports continues to grow, along with the Cove Point export facility now at full service after the maintenance at the beginning of this month. Last Wednesday, LNG exports hit a new record of 4.0 Bcf/d adding to the bullish fundamentals going into this winter. U.S. dry production is hovering around 83 Bcf/d, returning to healthy levels after some pipeline maintenance earlier this month.
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