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Daily Market Update August 09, 2021

Early Morning Update

The Sep ‘21 natural gas contract is trading down $0.06 at $4.08.  The Sep ‘21 crude oil contract is down $2.38 at $65.90.

Summary

Last week’s NYMEX natural gas pricing activity ended on a higher note, once again. The prompt month contract for September gained $0.226/MMBtu throughout the week, settling at $4.140/MMBtu. The bullishness spilled over into much of the front end of the curve, with calendar years 2022-2025 all gaining steam, while the longer terms of calendar years 2026-2030 all lost approximately one cent. Calendar year 2022 lead the pack, gaining $0.132/MMBtu to settle at $3.593, while 2023 gained $0.076/MMBtu to settle at $3.042. U.S. natural gas supplies remain relatively stagnant, hovering between 90-92 Bcf/day, an increase of nearly 3.0 Bcf/day versus August of 2020. However, demand from exports, both LNG and exports to Mexico via pipeline, are up 5.0 Bcf/day. This demand from exports has been a strong demand driver this year, bolstered by strong LNG prices. The question remains: how long will producers stick to capital discipline before higher prices incentivize more production? Weather forecasts are calling for a warm-up this week, which will likely lead to higher demand and the potential for peak demand notifications across ISOs, while putting upward pressure on index pricing.

 

Market Update 08 09 2021

Market Settles 08 06 2021

 

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