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Daily Market Update February 13, 2020

Early Morning Update

The Mar20 natural gas contract is trading up $0.02 at $1.86.  The Mar20 crude oil contract is up $0.13 at $51.30.

Summary

This week’s storage withdrawal to be reported by the U.S. Energy Information Administration this morning is expected to actualize around 104 Bcf/d. This number is more in line with last year’s 101 Bcf/d pull, versus last week’s withdrawal of 137 Bcf/d, which was about half of the corresponding week in 2019. Current storage levels are about 31% higher year-over-year, and nearly 8% above the five-year average. Mild weather forecasts and strong production continue to put significant downward pressure on near-term gas prices. The March prompt month contract settled at $1.844/MMBtu yesterday, which is up about a little over nickel day-over-day. The balance of 2020 settled at $2.09, while calendar strips 2021 – 2025 are all still below $2.50. News reports of producer hedges dropping off after 2020 have caused market participants to pay more attention to calendar strip pricing for 2021–2023, considering production is likely unsustainable at these low price levels.

Market Update021320

Market Settles 021220

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