Daily Market Update December 24, 2020

Early Morning Update

The Jan21 natural gas contract is trading down $0.03 at $2.58. The Feb21 crude oil contract is down $0.32 at $47.80.

Summary

Wow, what a day for natural gas yesterday! The market saw a huge 17-cent sell-off for the Jan '21 prompt month contract, closing out the day at $2.608/MMBtu. That bearishness echoed throughout the Cal '21 strip, as it lost 12 cents, and Cal '22 also experienced a loss of four cents. The large losses fizzled out, though, as the futures strips beyond '22 all lost just a penny or less. It appears the lower-than-expected storage report was the impetus the market needed to prompt the sell-off. While the 152 Bcf withdrawal was the largest weekly pull from storage so far this season, market forecasts were much higher. Add to that a bearish weather outlook in the Northeast, with well-above-normal temperatures expected into the New Year, and you have the recipe for the perfect market sell-off.

As a reminder, the Direct Energy Natural Gas Trigger Desk will be closed the remainder of the week starting today at 1:00 pm EST and reopen 8:30 am EST on Monday, Dec 28th, in observance of the Christmas holiday. Everyone at Direct Energy wishes you a very merry and safe Christmas!

Market Update 12 24 20