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Daily Market Update October 8, 2018

Early Morning Update

The Nov18 natural gas contract is trading up $0.10 at $3.24. The Nov18 crude contract is down $1.09 at $73.25.

 

Summary

On Friday, the prompt month natural gas futures price fell 2.2 cents on the day to settle at $3.143/MMBtu. Since becoming the prompt month, the Nov18 contract has seen upward pressure of about 17 cents, reaching a high of $3.230 last Wednesday. For the first time in a while, a bearish larger-than-expected storage injection was reported last week of 98 Bcf. Storage continues to be a bullish factor to pricing for this upcoming winter, and it appears that this recent large injection had little effect on the overall deficit, compared to historical benchmarks. There are expectations for volatility this winter, especially if we see below-normal temperatures. The 1-5 day weather forecast shows an even split, with extremely colder-than-normal temperatures for the western half of the country, and warmer-than-normal temperatures in the East. As cooling demand for natural gas starts to fall this week due to milder temperatures, power burn levels are expected to fall to around 26.5 Bcf/d. The cold temperatures in the West will have an opposite effect, with gains in heating demand up by 3.0 Bcf/d in the ResComm sector. U.S. dry productions has fallen slightly, hovering around 83 Bcf/d.

 

Market Update 100818

Market Settles 100518

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