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Daily Market Update July 24, 2020

Early Morning Update

The Aug20 natural gas contract is trading down $0.03 at $1.76.  The Sep20 crude oil contract is up $0.28 at $41.35 

Summary

Despite a weekly storage injection that exactly matched the five-year average and was in line with market analysts’ expectations, as well as declining power burns, LNG exports, and overall demand, prices for natural gas rallied during Thursday’s trading session. The prompt month moved up over a dime to settle at $1.785/MMBtu, while all of the months for the balance of 2020 climbed 5-12 cents. The 2021-2023 calendar strips were relatively flat in comparison, each climbing less than two cents, while 2024 and 2025 were up five and six cents, respectively. The jump in market prices came on the heels of the U.S. Energy Information Administration’s weekly storage report, which shows storage levels at a 656 Bcf (26%) surplus to levels seen the same time last year, as well as a 436 Bcf (16%) surplus to the five-year average. Meanwhile, power burns, which have been screaming so far this summer, have dropped 4.6 Bcf/d since Monday, while feedgas for LNG exports is down 0.5 Bcf/d day-over-day. Total U.S. demand for natural gas is down 2.4 Bcf/d today from yesterday, and has fallen 5.5 Bcf/d this week.

Market Update072420

Market Settles 072320

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