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Daily Market Update November 5, 2019

Early Morning Update

The Dec19 natural gas contract is trading up $0.06 at $2.88.  The Dec19 crude oil contract is up $0.46 at $57.00.

  

Summary

The natural gas market continued its rally yesterday, reacting to the rapid shift from a very warm October to a cold November. Residential and commercial heating demand has outpaced the five-year average by 30% over the last week, reaching 29 Bcf/d. With temperatures expected to fall further in the middle of November, demand in this sector is forecasted to hit nearly 34 Bcf/d. The prompt month contract reached a 6-month high yesterday, settling at $2.82/MMBtu. This settlement price represents a ten cent day-over-day move, and a 30 cent month-over-month increase. The rest of the Jan-Mar winter strip followed this pattern as well, settling at $2.81 averaged together. Despite the recent rally of the winter contracts, pricing for the next few calendar strips are still below $2.60. Cal ‘20 settled at $2.56, surpassing Cal ‘21 at $2.49. Cals ‘22 and ‘23 moved less than a penny yesterday, settling at $2.52 and $2.58, respectively.

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