Daily Market Update July 22, 2019
Early Morning Update
The Aug19 natural gas contract is trading up $0.03 at $2.28. The Aug19 crude oil contract is up $0.72 at $56.35.
Summary
On Friday, the August 2019 NYMEX natural gas futures price continued its downward trend, falling 3.6 cents on the day to settle at $2.251/MMBtu. Downward pressure on pricing has returned, as weather forecasts cool and expectations that demand will depress for the Northeast and Southeast in the power burn sector this week. At a time when demand is expected to dip, U.S. dry production levels have returned to record setting highs, after falling last week due to Tropical Depression Barry. So far this month, total U.S. production has averaged just over 88.0 Bcf/d, and is still expected to climb through the end of this year. In the 1-5 day weather forecast, we are seeing the extreme heat retreat from the Northeast, a major U.S. demand center for natural gas, and followed by some normal to cooler-than-normal temperatures for the middle of the country. The blanket of heat returns to the Northeast in the 6-10 day forecast, and appears to linger in the region throughout the beginning of August. With the return of warmer temps following this week, we may see a jump in power burn demand once again, and the potential for upward pressure to pricing.
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