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Daily Market Update August 10, 2020

Early Morning Update

The Sep20 natural gas contract is trading down $0.05 at $2.19.  The Sep20 crude oil contract is up $0.58 at $41.80.

Summary

As the new week begins, the market is digesting another ominous COVID-19 weekend milestone of five million confirmed U.S. cases, and, with a divided government unable to find common ground on unemployment benefits, the uncertainty is clearly weighing on the markets and the potential for quick economic recovery. That uncertainty is helping fuel a rally across the energy markets. Since debuting as the prompt month on July 30th, September 2020 gas has risen $0.38 to settle Friday at $2.238/MMBtu – an 8-month high for the prompt month. The market is also showing strength for the upcoming winter in spite of a strong storage outlook and surprisingly resilient production. The Q1 ‘20 forward strip settled at a 4-month high on Friday at $3.07/MMBtu. The recent rally has been largely confined to the next 12 months, but, week-over-week, all longer term NYMEX strips are up a couple pennies, as well.  Is this the sign of a trend or a blip on the radar? In other news, be on the lookout for peak demand alerts from Direct Energy this week – notably in PJM and ERCOT. A short heat wave will be focused on the mid-Atlantic early this week, and ERCOT heat looks to peak later in the week.

Market Update081020

Market Settles 080720

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