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Daily Market Update July 16, 2020

Early Morning Update

The Aug20 natural gas contract is trading up $0.01 at $1.79.  The Aug20 crude oil contract is down $0.50 at $40.70.

Summary

Yesterday’s modest gains in the short-term natural gas market were, again, most-likely driven by weakened supply and the expected increase in cooling demand via the current warmer-than-normal temperature outlook. The August-October contracts climbed $0.03/MMBtu day-over-day, responding to the current heat wave that is forecasted to linger through the beginning of August. The above-normal temperatures over the last few weeks have already pushed power burn levels higher year-over-year, and this spread will probably increase as we move throughout the summer. Today’s storage expectations may also have caused some short-coverings yesterday, given today’s report will likely fall below the five year average of 63 Bcf - within the range of 38-50 Bcf. Movement in the prices for natural gas contracts beyond December was very minimal during yesterday’s activity, as individual months gained or lost only a fraction of a penny.

Market Update071620

Market Settles 071520

 

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