Daily Market Update September 30, 2020
Early Morning Update
The Nov20 natural gas contract is trading down $0.10 at $2.46. The Nov20 crude oil contract is down $0.09 at $39.20.
Summary
Yesterday was another busy day of selling in the natural gas market, as the NYMEX prompt month fell a whopping $0.23 (8.4%), settling at $2.56/MMBtu. The selling didn’t stop there, as the Dec ‘20 contract lost 15 cents, the 12-month strip lost almost a dime, and Cals ‘21 and ‘22 lost seven and three cents, respectively. Weather forecasts are calling for a blip of cold to overtake many parts of the Midcontinent and eastern parts of the U.S. by this weekend, providing an early lift to residential/commercial heating demand. However, the cold appears to be short-lived, and a return to above-normal temps dominates the 11-15 and 16-20 day forecasts. If these patterns hold true, heating demand will take a back seat for the second half of October, allowing for more gas to build into storage. Natural gas production remains steady, averaging 87.0 Bcf/day for September. LNG exports are continuing to rebound, as Cameron LNG slowly comes back on line after sustaining damages from Hurricane Laura. Prior to halting operations, Cameron had been exporting an average of 1.16 Bcf/day so far this year. A quick return could easily push exports over the 7.0 Bcf/day mark.
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