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Daily Market Update December 1, 2020

Early Morning Update

The Jan21 natural gas contract is trading up $0.02 at $2.90. The Jan21 crude oil contract is down $0.24 at $45.10.

Summary

The beginning of this week began with increasing demand, as temperatures sink further with winter really beginning now. This comes as bullish news for the market, which had a short, two-week stint as a bear market due to warm weather forecasts and further COVID responses. The greatest demand increase has come from the residential/commercial (res/comm) and power burn sectors, which rose 14.3 Bcf/d and 5.2Bcf/d, respectively, just since Thanksgiving. To put this in perspective, this is approximately a 52% increase for res/comm and a 22% increase for power burn. As we look forward, temperatures appear to still be rather cold for about the next week, creating even higher forecasted demand for res/comm. Thoughts surrounding production are rather mixed. Since the middle of the summer, the market has experienced an increase in production from 82 to nearly 90 Bcf/d, but prices have not recovered "enough" for most producers to be profitable when running. Prices have already come off the bottom, but if supply remains limited as demand increases with winter weather, we may see some long term bullish impacts on the market in the two-year outlook.

 

Market Update 12 01 20

Market Settles 11 30 20

 

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