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Daily Market Update September 10, 2020

Early Morning Update

The Oct20 natural gas contract is trading down $0.06 at $2.35. The Oct20 crude oil contract is down $0.55 at $37.50.

Summary

The bulls and bears continue to box for position in the now-stable natural gas market, as supply has finally chased down demand. As a result, the prompt month settled flat yesterday at $2.406/MMBtu, while the subsequent 24 monthly contracts moved about a penny or less day-over-day. The bullish fundamentals of normalizing demand and stunted supply have seemingly lost their influence on the front month contracts. Despite gas deliveries to LNG feedgas terminals hitting their highest level since May, nearing 7.0 Bcf/d, the strong natural gas prices of late have been self-defeating, as production has grown to nearly 88 Bcf/d. This recent production rally caused the U.S. Energy Information Administration to increase their outlook for 2021 to 86.6 Bcf/d, up by 3.1% from their August forecast. Proof of stronger supply may be seen this morning, as today’s storage estimates may only strengthen the bears. Today’s storage number is expected to fall within the range of 60-73 Bcf, with a 68 Bcf consensus of market analysts. A build at consensus would exactly match the 5-year average injection, unlike the reports over the past few weeks, which have fallen shy of that benchmark.

 

Market Update 09 10 2020

Market Settles 09 09 2020

 

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