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Daily Market Update September 18, 2019

Early Morning Update

The Oct19 natural gas contract is trading flat to yesterday’s close at $2.67.  The Oct19 crude oil contract is down $1.14 at $58.20.

  

Summary

It was a quiet day on the NYMEX yesterday, with the October 2019 contract losing a modest 1.3 cents to settle at $2.668/MMBtu amid lower demand outlooks and stagnating production. The National Weather Service slightly decreased the probability for warmer-than-normal temperatures along the eastern two thirds of the country in their 6-10 and 8-14 day outlooks, prompting lower demand outlooks for the next few weeks. Forecasts predict demand to average ~69 Bcf/d during the next two weeks, down ~3 Bcf/d from current demand levels. On the supply side, U.S. domestic dry gas production remains steady around 90 Bcf/d. However, the August 2019 EIA Drilling Productivity Report released on September 16 shows a continued decline in the drilled but uncompleted well (DUC) count month-over-month. According to the report, the count went from 8,092 to 7,950, and all regions reported lower with the exception of Haynesville. To preserve the supply demand balance moving forward, continued production growth will be required, as demand is expected to grow in coming years, specifically due to power burn and export growth.

 

Market Update091819

Market Settles 091719

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