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Daily Market Update October 1, 2020

Early Morning Update

The Nov20 natural gas contract is trading up $0.03 at $2.56. The Nov20 crude oil contract is down $0.52 at $39.70.

Summary

The November natural gas contract took a slightly bearish turn yesterday and lost three cents, settling at $2.53. The prompt month was the biggest mover, as the remaining months in the 12-month strip all gained or lost less than a penny. This similar lack-of-movement was echoed further out on the curve, as well. Calendar strips '21-'25 all gained or lost less than a penny, on average. With the movement focused on the Nov contract, this bearishness is associated with warmer-than-normal temperatures in near-term weather forecasts. While below-normal temperatures are forecast over the next few days in Midcon and Southeast, above-normal temperatures become more widespread in the 6-20 day forecast, with many portions of the U.S. calling for temperatures as much as eight degrees higher than the 30-year normal. During the summer months, deviations above normal are a bullish signal to the market due to higher demand for cooling, but in the shoulder season, when normal temperatures are more moderate, this actually helps to stave off early on-set heating demand. If the weather forecasts hold true, this could lead to larger storage injections due to lower NG demand. This morning, the EIA will release their weekly storage report, where market participants are expecting an injection of 76 Bcf to be reported, which slightly trails the 5-year average of 78 Bcf.

 

Market Update 10 01 2020

Market Settles 09 30 2020

 

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