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Daily Market Update September 21, 2020

Early Morning Update

The Oct20 natural gas contract is trading down $0.08 at $1.97. The Oct20 crude oil contract is down $0.91 at $40.20.

Summary

As another work week begins, the U.S. saw its share of historical weather over the past week. Between fires on the West Coast, Hurricane Sally making landfall in Alabama, and record low September temperatures across the central & eastern U.S., the energy market has been keeping close tabs. The next major weather events are Tropical Storm Beta, which will impact the TX gulf coast later this evening as a rain event (2-5” inches + higher local amounts), and Hurricane Teddy, impacting Atlantic Canada and extreme eastern New England on Tuesday morning. The weather seems to have had an effect on the Oct ‘20 NYMEX prompt month, as the market anticipates demand destruction from these storms. On August 30th, the prompt month settled at a 10-month high at $2.657/MMBtu, but has since dropped 25% over the past three weeks! The move has been contained to the near terms, as Cal ‘21 continues to trade above $2.90/MMBtu since August 27th. Could we see Cal ‘21 begin to drop off as the Oct prompt month has? It’s certainly worth watching, as the market weighs COVID & weather-related demand, production stabilization, and winter weather forecasts, all with the contentious presidential election in the background.

 

Market Update 09 21 2020

Market Settles 09 18 2020

 

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