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Daily Market Update October 20, 2020

Early Morning Update

The Nov20 natural gas contract is trading up $0.11 at $2.91. The Nov20 crude oil contract is down $0.23 at $40.60.

Summary

Yesterday, the November NYMEX natural gas contract saw a lot of intraday movement, but closed the day at $2.795/MMBtu, just 2.2 cents higher than Friday’s close. Cals ‘23-’26 saw gains of around four cents, as well, but the 12-month strip and Cals ‘21 and ‘22 saw movement of only 1.5 cents or less. Week-over-week changes tell a different story, with the prompt month losing 8.6 cents compared to last Monday, but gains beyond the prompt of 4.3 cents for the 12-month strip and Cal ‘26, and gains of 7-11 cents for Cals ‘21-’25. The Nov ‘20 - Mar ‘21 winter strip closed yesterday at $3.224/MMBtu and is up another 5.5 cents this morning, currently at $3.272. Natural gas production has shown a rebound at 90 Bcf/d, increasing from summer averages of 86-88 Bcf/day and recovering from recent shut-ins during Hurricane Delta, but the outlook still remains bullish amidst supply concerns for the upcoming winter. While storage inventory is strong as we approach withdrawal season, U.S. production is predicted to remain about 8.0 Bcf/d below last year’s winter production, potentially causing a supply shortage, especially if the early cold expected in December turns into sustained cold further into the winter.

 

Market Update 10 20 2020

Market Settles 10 19 2020

 

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