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Daily Market Update November 26, 2019

Early Morning Update

The Dec19 natural gas contract is trading down $0.06 at $2.47.  The Jan20 crude oil contract is up $0.29 at $58.30.

  

Summary

The natural gas market has continued to perform in a fashion that’s seemingly counterintuitive to the major price-driving fundamentals that generally influence it. Despite colder revisions to the twenty day weather forecasts, the December, January, and February contracts each lost more than ten cents during yesterday’s trading activity. The settlement prices at the end of the day were $2.531, $2.584, and $2.541, respectively. A potential driver of this slide in prices could be attributed to very healthy levels of supply. Although the currently weak market prices have been threatening to eclipse producer’s break-even prices for the last year, storage levels continue to strengthen as record production levels weigh heavily on prices. Thus, the market most-likely believes that supply is healthy enough to withstand any extreme weather this upcoming winter. The latest production record was established on Saturday at 93.2 Bcf per day. Because time is running out, it may be beneficial to consider locking up any open gas positions for this upcoming winter, if necessary.

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Market Settles 112519

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