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Daily Market Update October 8, 2020

Early Morning Update

The Nov20 natural gas contract is trading down $0.08 at $2.53. The Nov20 crude oil contract is up $0.75 at $40.70.

Summary

On Wednesday, the natural gas prompt month continued its roller coaster ride, gaining back 8.6 cents and settling at $2.606/MMBtu. The bearish supply outlook once again unevenly rippled through the twelve-month strip during yesterday’s natural gas trading session. The November through March contracts had the largest day-over-day deviations within the term, each strengthening at least $0.06/MMBtu, as Gulf producers shut-in and brace for potential disruptions via Hurricane Delta. The storm, expected to make landfall in southwest Louisiana on Friday as a category 3, has caused nearly 1.5 million bbl/d of oil and 1.4 Bcf/d of natural gas to be taken offline as of last night, further damaging an already depressed fleet of supply. These levels account for roughly 80% and 50%, respectively, of offshore oil and gas production. The back-half of the twelve-month strip showed only modest movement, between $0.01 and $0.034/MMBtu. Storage estimates for today’s release likely played an outside role, if any, regarding yesterday’s market impact. The higher bookend of the 67-85 Bcf injection range is right in line with the five-year average.

 

Market Update 10 08 2020

Market Settles 10 07 2020

 

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