Daily Market Update December 14, 2020

Early Morning Update

The Jan21 natural gas contract is trading up $0.08 at $2.67. The Jan21 crude oil contract is up $0.43 at $47.00.

Summary

On Friday, the January 2021 NYMEX natural gas futures price climbed 3.8 cents on the day to settle at $2.591/MMBtu. The prompt month climbed slightly week-over-week, up about two cents. Bearish conditions continue to dominate, with the major factor being warmer-than-normal forecasts for the eastern half of the country through the end of the month. Even with normal temps, winter weather has started to pushed up demand, rising to levels we have not seen since mid-February. Yesterday, LNG exports reached a new all-time high of 11.54 Bcf/d. As pricing has dropped in the U.S., global pricing for LNG is climbing, increasing demand for exports, with one obstacle being that there are not enough ships to transport the liquid fuel. This could be a support to pricing in the near term. According to the CFTC, Managed Money is still net long over 30,000 contracts. U.S. dry production is averaging just under 90.0 Bcf/d so far this month. Northeast production, which had been hovering near record levels, has dipped slightly to just over 33.0/Bcf, the lowest since mid-November.

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