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Daily Market Update November 19, 2020

Early Morning Update

The Dec20 natural gas contract is trading down $0.15 at $2.56. The Dec20 crude oil contract is down $0.07 at $41.75.

Summary

This morning’s strong selloff in the natural gas market may be a great buying opportunity, as winter uncertainty lingers. Waning heating demand and healthy gas stockpiles continue to put downward pressure on short-term NYMEX natural gas contracts. Res-comm demand is down nearly 6.5 Bcf/d, as the warmer-than-normal temperatures forecasted for the Northeast more than offset any demand increases from school closures and stay-at-home orders. Further, today’s storage report is expected to show an injection of nearly 22 Bcf. This is a sharply bearish contrast to last year’s 66 Bcf withdrawal for the same week. While there was minimal movement in yesterday’s gas market, the front winter contracts have lost significant value this morning in reaction to the refreshed demand outlook. The December 2020 through March 2021 contracts are already down at least $0.13/MMBtu each. Contracts within the balance of 2021 are down slightly less, at least $0.07/MMBtu each. It’s unknown if this bearish trend will persist, as the supply and demand fundamentals driven by COVID are changing rapidly.

 

Market Update 11 19 20

Market Settles 11 18 20

 

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