Daily Market Update July 22, 2020
Early Morning Update
The Aug20 natural gas contract is trading down $0.04 at $1.64. The Aug20 crude oil contract is down $0.62 at $41.30.
Summary
Yesterday’s trading session saw broad upward movement throughout the NYMEX curve for natural gas. The prompt month gained 3.4 cents to close at $1.675/MMBtu, and the balance of 2020 moved up a 2.3 cents. The calendar strip for 2021 showed nearly no movement, but beyond the next calendar stirp on the board, each subsequent year throughout the curve gained more than the previous. Calendar 2022 gained just over half of a penny, Cals 2023 through 2028 gained between a penny and 1.5 cents, while 2029 through 2032 all moved up two cents. The market is backwardated from 2021 through 2023, with 2023 being the low point at $2.424, but then flips to contango. With much of the continent experiencing milder temperatures, power burn continues to lead the fall in overall demand, down about one Bcf/d yesterday and expected to be down 1.5 Bcf/d today. Production is down from the 88 Bcf/d levels at the end of last week and through the weekend, but still holding steady right around the 87 Bcf/d range.
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