Daily Market Update August 10, 2021
Early Morning Update
The Sep ‘21 natural gas contract is trading down $0.01 at $4.05. The Sep ‘21 crude oil contract is up $0.72 at $67.20.
Summary
The September NYMEX natural gas contract ended trading yesterday at $4.060/MMBtu, eight cents lower than where it settled on Friday. This comes amidst a decline in demand, as exports decrease due to regular maintenance. As a result, exports have gone down from their historical highs in the last few months of around 12 Bcf/d to recent lows around 9.5 Bcf/d. Meanwhile, demand via Mexican pipeline has also decreased, as that region sees more normal temperatures rather than hotter weather that they had been experiencing. Speaking of weather, August is appearing to be an above-average month, as nearly all markets, excluding Texas, forecast for hotter-than-normal weather. Due to the higher temperatures, power burn is expected to increase along with day-ahead prices in most markets. One other thing to note for natural gas markets is the fact that 2023 is starting to separate from further-out strips of 2024 and 2025 and move upwards, increasing backwardation, similar to that of 2022’s pattern.
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