Daily Market Update August 1, 2019

Early Morning Update

The Sep19 natural gas contract is trading up $0.08 at $2.31.  The Sep19 crude oil contract is down $1.98 at $56.60.

Summary

The September NYMEX natural gas contract settled at $2.233/MMBtu yesterday, gaining almost ten cents amid warmer weather forecasts. This upward movement was shared throughout the NYMEX pricing curve, as the balance of 2019 gained around eight cents, and forward calendar strips through 2025 moved up slightly. Market consensus predicts an injection of 52 Bcf to be reported by the U.S. Energy Information Administration in the weekly natural gas storage report coming out later today. If this injection level actualizes, then it would beat the 5-year average of 37 Bcf, and contribute to cutting down the deficit once again. This above-average injection is anticipated to be the same case next week, as production is expected to continue to stay at higher levels, while demand declines. Over the next two weeks, dry production is predicted to average 88.9 Bcf/d, while demand drops down from yesterday’s 76.9 Bcf to 73 Bcf/d. Short-term weather forecasts over the next 20 days show warmer temperatures throughout the West and Southwest. Since this heat would be affecting major demand centers like Texas and California, it could introduce some volatility into the index markets.

Market Update080119