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Daily Market Update August 23, 2021

Early Morning Update

The Sep ‘21 natural gas contract is trading up $0.06 at $3.91  The Sep ‘21 crude oil contract is down $2.06 at $64.20.

Summary

Last week’s NYMEX natural gas pricing activity was a bit of a mixed bag with a near-term sell-off, while longer terms crept higher. The prompt month lost a dime over the week, while Q4-21 lost nearly two cents, and Q1-22 lost 3.5 cents. The 2022 and 2024 calendar strips lost 2.2 and 0.8 cents, respectively. While 2023 gained half of a penny, 2025 gained 1.6 cents, and 2026-2030 all gained three cents. The Energy Information Administration reported a bearish 46 Bcf net injection for the week ending August 6th, after reclassifying 4 Bcf in the South Central Region. This surprised market participants and was largely driven by a reduction in gas-fired electric generation as more coal power and wind generation increased. Power burns are down 1.7 Bcf/day versus 2020, as higher prices and generally more moderate temperatures on the East Coast and Midwest have caused headwinds. LNG exports and pipeline exports to Mexico have continued to drive demand higher, resulting in a combined 3.9 Bcf/day increase vs. last year. Production, on the other hand, remains stubbornly unchanged. After a few days of cooler temperatures, widespread warmth appears to return for late August into early September. With higher temperatures in the forecast for the Midwest and Northeast, power burns should rise to meet the expected increase in demand.

 

Market Update 08 23 2021

Market Settles 08 20 2021

 

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