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Daily Market Update December 3, 2020

Early Morning Update

The Jan21 natural gas contract is trading down $0.14 at $2.64. The Jan21 crude oil contract is down $0.03 at $45.25.

Summary

The NYMEX natural gas market saw a substantial selloff yesterday, with the prompt month shedding a dime and Cal '21 losing a nickel. The prompt month closed the day at $2.780/MMBtu, which is the lowest settlement so far for Jan '21 as the prompt month. The downward movement remained centered at the front of the curve, as the outer calendar strips experienced very little movement. Warmer weather in the Northeast bolstered a drop in res/comm heating demand by 1.6 Bcf/d from yesterday, and, similarly, power burn demand in the Southeast dipped by 1.3 Bcf/d day-over-day. This drop in demand was enough to tip the fundamentals scale and lean the market in a more bearish direction. Another component that could tip the scale further is the natural gas storage report that will be released later this morning. This week's storage report is expected to show a minimal withdrawal of roughly 16 Bcf for the week ending Nov. 27. If this actualizes, this would be considerably lower than both last year's draw of 47 Bcf, as well as the 37 Bcf five-year average withdrawal.

 

Market Update 12 03 20

Market Settles 12 02 20

 

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