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Daily Market Update October 27, 2020

Early Morning Update

The Nov20 natural gas contract is trading flat to yesterday’s close at $3.01. The Dec20 crude oil contract is up $0.24 at $38.80.

Summary

The NYMEX prompt month appears to be battling to stay above $3.00 and has fluctuated approximately four cents around the mark for the last couple of days. Bullish factors include the upcoming end of the injection season, where, despite the nearly 4.0 Tcf inventory, minimal storage inputs are propping up winter term pricing. As temperatures fall and more gas is used for heating load, prices will continue to rise with potential for higher upside risk if the U.S. receives a colder start to the season than expected. Looking at longer term pricing, the natural gas market has seen an increase across the board for calendar strips, with '21 and '22 settling approximately ten cents higher week-over-week. Hurricane Zeta is being projected to land close to the LA/MS border, lessening the impact on major LNG facilities. Although it is forecast to be weaker than the previous destructive hurricanes, shut-ins will occur, slowing production. A final bull factor includes the fact that LNG exports have returned to record levels that we had seen right before the pandemic. The higher level of international demand is not only going to prop up our prices now with winter coming into play, but will likely have long term consequences to our domestic supply and demand.

 

Market Update 10 27 2020

Market Settles 10 26 2020

 

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