Daily Market Update January 17, 2019
Early Morning Update
The Feb19 natural gas contract is trading up $0.16 at $3.54. The Feb19 crude oil contract is down $0.91 at $51.40.
Summary
The Feb19 NYMEX natural gas contract dropped 11.7 cents yesterday to settle at $3.384/MMBtu. On Wednesday, supply dropped 0.7 Bcf to 84.54 Bcf/d. The Northeast and Texas are both down ~0.3 Bcf/d since Tuesday, while the Rockies were also down 0.2 Bcf/d day-over-day. Rockies production has continued its slow recovery, building to an average of 8.4 Bcf/d over the past five days, yet production is still down considerably from pre-freeze-off levels. Midcon, Rockies, and Northeast production run the risk of freeze offs this upcoming weekend, as temps dip below 10-15 degrees Fahrenheit in these regions on Sunday and Monday. Yesterday, demand was also down 4.42 Bcf/d since Tuesday to 102.87 Bcf/d, above average levels of 96.5 Bcf/d for the third week of January. Day-over-day demand losses are mostly coming from the South, as Southeast (-1.6), Southwest (-0.98), and Texas (-1.5) are all down. With colder temperatures approaching, increasing demand across most of the United States will generate continued NYMEX volatility, as well as a strain on overall storage levels.
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