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Daily Market Update December 16, 2019

Early Morning Update

The Jan20 natural gas contract is trading up $0.004 at $2.30.  The Jan20 crude oil contract is down $0.02 at $60.05

Summary

On Friday, the Jan19 natural gas futures price fell 3.2 cents to settle at $2.296/MMBtu. U.S. dry production is below the record high we saw last month, but remains at healthy levels, averaging just over 92.0 Bcf/d, about 5.0 Bcf/d higher than this time last year. Last week, Chevron, one of the largest natural gas producers in the country, announced that it plans to divest its Appalachian business, meaning no new drilling in 2020. This may be some confirmation that this low price environment may not be sustainable for producers, and not just for the smaller players. Weather forecasts did cool significantly throughout the week, showing much cooler-than-normal temps in the back half of the week for the Northeast. However, this cold is, once again, short-lived, returning to more normal to warmer-than-normal temps in the 6-10 day outlook. It appears the majority of the country will be experiencing this blanket of warmth through the holiday next week. LNG exports reached a new all-time high early last week of just over 8.0 Bcf/d. As demand from exports grows next year, it will be interesting to see if supply can continue to remain at these levels in this low price environment.

Market Update121619

Market Settles 121319

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