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Daily Market Update November 17, 2020

Early Morning Update

The Dec20 natural gas contract is trading flat to yesterday’s close at $2.70. The Dec20 crude oil contract is down $0.64 at $40.70.

Summary

There have been a lot of changes this week in the near-term natural gas market. The prompt month fell almost 30 cents yesterday. This is the general downward movement seen for the entire Cal ‘21 strip and through the first quarter of ‘22. This has had effects on electric pricing, as well, bringing prices across the Northeast for Cal ‘21 down by significant amounts. For the first quarter of ’21, we haven’t seen lower prices in PJM than where they currently are, indicating now could be a great buying opportunity for this upcoming winter. Temperatures appear to be more bearish for the near-term, with the 20-day forecast showing above-normal temps into the first week of December. This is likely a major market mover in the natural gas space, due to the unusually warm weather. If forecasts hold, this November will be the 3rd warmest on record, and should also decrease our residential, commercial, and power burn demand. Long-term effects of this may show through production. If lowered prices persist heading into winter, lower production levels may follow, which could, ultimately, bring natural gas and electric prices back up very quickly at the first sign of cold this winter.

Market Update 11 17 20

Market Settles 11 16 20

 

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