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Daily Market Update August 26, 2020

Early Morning Update

The Sep20 natural gas contract is trading up $0.04 at $2.53.  The Oct20 crude oil contract is down $0.15 at $43.20.

Summary

The NYMEX natural gas prompt month contract lost $0.024 yesterday, opening the day at $2.513/MMBtu and closing at $2.489/MMBtu. As the Texas-Louisiana coasts brace for Hurricane Laura, affecting millions of people, the storm could potentially have big impacts on the region’s energy sector. The path of the storm is peppered with infrastructure supporting oil & gas production, refineries, and export terminals. In particular, Cheniere Energy is halting operations at Sabine Pass, America’s largest LNG export terminal, for the first time. LNG exports had taken a hit during the pandemic, dropping down to near 3.0 Bcf/d, after reaching a record high 9.5 Bcf/d in March. In August, exports had risen back to 5.0 Bcf/d, but will almost certainly fall again with Laura’s anticipated impact. Natural gas production remains relatively steady, averaging 87.3 Bcf/d for the month, despite over 60% of the Gulf of Mexico’s offshore production being curtailed due to this week’s tropical storms. Looking ahead, tomorrow’s weekly storage report from the U.S. Energy Information Administration is expected to show an injection that is less than the 5-year average for the week to August 21.

Market Update082620

Market Settles 082520

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