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Daily Market Update January 31, 2020

Early Morning Update

The Mar20 natural gas contract is trading down $0.03 at $1.83.  The Mar20 crude oil contract is up $1.03 at $52.30. 

 

Summary

Another small slide in prices as the NYMEX prompt NG contract fell $.036 to close at $1.829.  The relentlessly mild weather forecasts are the primary culprit for lower prices.  Forecasts from all sources are calling for above average temperatures up and down the east coast for the next 15-20 days.  Implied heating-related demand will almost certainly be down over that period and storage balances are set to increase the surplus over last year and the 5-year average.  What is needed to cause a price recovery is a tightening of the supply/demand balance, through either lower supply or higher demand.  Higher demand doesn’t seem imminent, but lower supply might as one producer after another has announced their intention to slow investment in new drilling due to the persistently low price environment.  Whether or not the slowdown happens soon enough to save 2020 is another matter.  But for now, customers can enjoy low gas and power pricing.

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