Daily Market Update October 28, 2020
Early Morning Update
The Nov20 natural gas contract is trading up $.01 to yesterday’s close at $3.02. The Dec20 crude oil contract is down $1.85 at $37.72.
Summary
Today marks the last trading session for the November contract as it reaches it’s expiration date and December becomes the new prompt month. Yesterday’s trading activity left little change in the November contract, losing half a penny, opening the day at $3.024/MMBtu and closing at $3.019/MMBtu. However, the December contract gained 1.8%, or $0.058/MMBtu. The twelve-month strip, and calendar year 2021 gained two pennies each. While calendar year 2022 gained less than a penny. As the Gulf Coast braces for yet another storm, Zeta threatens off-shore production rigs. As such, preliminary estimates are calling for a drop of 700 MMBtu/day of natural gas production, and an additional 300 MMBtu/day loss in on-shore production in Texas. Northeast production, on the other hand, is projected to be up 500/MMBtu’s. All-in-all, a net loss of 500 MMBtu’s is expected. Demand continues to trend higher, lead by colder temperatures driving residential heating demand. Looking ahead, tomorrow’s EIA storage report is expected to report an injection that is less than the 5-year average.
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