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Daily Market Update December 13, 2019

Early Morning Update

The Jan20 natural gas contract is trading down $0.06 at $2.26.  The Jan20 crude oil contract is up $0.55 at $59.73.    

Summary

The NG market saw a rally in pricing yesterday, with the prompt month contract trading higher by $.085 to close at $2.328.  The rally was caused by shifting weather forecasts, which now call for slightly less warm temps along the east coast.  The concern is, of course, that forecasts will continue to shift and we’ll begin to see real below-average temps and that heating demand will pick up.  We’ve been burning nearly 6 Bcf/d less for heating-related demand than this time last year, allowing storage to remain at a high level.  Strong NG production and low heating demand have offset the strong NG exports.  But production has started to slow and is down nearly 2Bcf/d from the high levels set 2 weeks ago.  For some time now, producers have been saying that they’re going to slow down production, especially in the northeast.  So whether this is the start of it, or just a temporary dip remains to be seen.

On the storage side, the EIA reported a draw of 73 Bcf yesterday.  That draw was a touch lower than the consensus of estimates, but not enough to stem the rally in prices.

Market Update121319

Market Settles 121219

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