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Daily Market Update February 10, 2020

Early Morning Update

The Mar20 natural gas contract is trading down $0.08 at $1.78.  The Mar20 crude oil contract is down $012 at $50.20.

 

Summary

After the first snowstorm struck parts of the Northeast on Friday, weather forecasts continue to show above-normal temperatures for the balance of the month for the East Coast, with some cold shots mixing in. The trend of above-normal winter temps hasn’t just been a U.S. phenomenon – winter heating demand across the entire northern hemisphere is down. In terms of heating degree days (HDD) so far this winter, the U.S. is 12% under the 10-year average, while Asia and Europe are down 14% and 13%, respectively. Without normal winter temperatures spurring demand, the market continues to search for supply and demand balance. The supply situation looks more bearish compared to last week, with end-of-winter estimates hedging higher to around 1.9 Tcf – about 300 Bcf higher than the 5-year average and 600 Bcf above last year. These bearish fundamentals allowed natural gas prices to hit new all-time lows for Cals 2021 thru 2025 last Wednesday, before bumping a penny higher later in the week. Cal 2021 & 2022 strips have traded under the $2.40 resistance barrier since 1/21 & 1/24, respectively, and Cal 2023 is knocking on the $2.40 door at $2.42.

Market Update021020

Market Settles 020720

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