Daily Market Update July 14, 2020
Early Morning Update
The Aug20 natural gas contract is trading down $0.02 at $1.72. The Aug20 crude oil contract is down $0.80 at $39.30.
Summary
Previously, natural gas prices had been rallying with the prompt month on a weekly gain, but the trading day on Monday reversed a lot of those gains, losing over six cents and falling all the way to $1.739/MMBtu. The higher volatility for natural gas prices has been primarily affecting the near-term, while strips further out are staying more constant. As far as weather goes, the temperatures are still above average, with Texans experiencing the highest deviation above average right now, and the areas around the Great Lakes expecting even higher temps starting in the next couple of days. Demand for natural gas has deteriorated somewhat, with power burn decreasing 0.3 Bcf/d day-over-day to 43.1 Bcf/d. Canadian imports have decreased 0.6 Bcf/d from yesterday to 3.7 Bcf/d, becoming the largest reason for the daily decrease of total supply falling by 0.7 Bcf/d. Year-over-year, we're still seeing power burn hold the line with an increase of 1.8 Bcf/d, propping itself up by being the replacement for coal-fired power plants. Every other major demand sector for natural gas has fallen or stayed flat.
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