Daily Market Update December 17, 2020

Early Morning Update

The Jan21 natural gas contract is trading flat to yesterday’s close at $2.68. The Jan21 crude oil contract is up $0.28 at $48.10.

Summary

The Northeastern snowstorm wasn’t enough to disrupt the natural gas fundamentals for the first quarter of 2021 and beyond, as yesterday’s trading session was mostly uneventful. Warmer-than-normal temperatures and lower demand levels across most of the rest of the country, which are expected to carry through the next few weeks, seemed to stabilize the national landscape for gas. The January prompt contract, which has been very active over the last few weeks, lost only $0.005/MMBtu during a seemingly volatile day. The February and March contracts performed similarly, gaining just $0.001/MMBtu and $0.003/MMBtu, respectively. Contracts within the rest of the twelve-month strip and beyond strengthened slightly, up about $0.02/MMBtu. Today’s expectation of a bullish storage report may have fueled some of the gains within the back of the curve. The range of withdrawals for the week to December 11th is 105 to 137 Bcf, much higher than the 105 Bcf five year average draw. Pulls from storage for the next two weeks are also expected to be much higher than historical averages (73 Bcf more than the 5YA), which will decrease the current surpluses significantly.

Market Update 12 17 20