Daily Market Update July 2, 2019

Early Morning Update

The Aug19 natural gas contract is trading up $0.01 at $2.28.  The Aug19 crude oil contract is down $0.69 at $58.40. 

Summary

Although the eastern U.S. continues to see some warm conditions, the NYMEX natural gas prompt month fell 4.1 cents to $2.267/MMBtu. Gas forward prices through calendar strips 2025 also experienced a downward price movement, but losing no more than a few pennies each. These low prices can be attributed to the mild start to summer, as well as strong production and the healthy storage outlook. The current bearish fundamentals could easily turn bullish for pricing, as the future downside could be limited. Further, weather forecasts for the upcoming two weeks are predicting some above-average temperatures reaching the main demand centers along the coasts. The hotter weather front has analysts estimating demand to average 68.5 Bcf/d this week. This expectation is the highest level of total natural gas consumption for a full summer injection season week. The high levels of demand are mainly attributed to increasing power burns, which are expected to average 39.3 Bcf/d. In the 16-20 day outlook, the warmer weather is forecasted to dissipate, with most of the continental U.S. showing normal conditions.

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