Daily Market Update September 23, 2020
Early Morning Update
The Oct20 natural gas contract is trading up $0.11 at $1.94. The Nov20 crude oil contract is up $0.10 at $39.90.
Summary
Yesterday’s natural gas trading saw more downward movement in the near-term, but this time for the upcoming winter strip of Nov ‘20 to Mar ‘21. The largest drop was in the November contract, which lost 11.3 cents to close just below $2.60, while the strip lost six cents, on average. This movement worked to narrow the spread between the October prompt month and November contracts, as October was flat on the day, recording a drop of just one tenth of a cent to $1.834/MMBtu. The forward calendar strips were mixed, with 2021 being the only year that moved down, dropping 2.3 cents to $2.928, and Cals ‘22 through ‘24 flat, all gaining less than a penny. Further out, there was broad upward movement, with 2025 adding over a penny, and 2026 through the end of the curve adding just under four cents. Natural gas production is down about 1.0 Bcf/d today near 85 Bcf/d, a recent low, as the Gulf and Southeast regions continue to face the effects from the recent storms coupled with maintenance outages holding back Northeast output. LNG feedgas also remains lower for the time being due to storm activity, as well as Cove Point in Maryland being down for planned annual maintenance.
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