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Daily Market Update August 30, 2021

Early Morning Update

The Oct ‘21 natural gas contract is trading down $0.08 at $4.31. The Oct ‘21 crude oil contract is up $0.16 at $68.90.

Summary

The big news over the weekend was Hurricane Ida as it quickly developed from Friday to Sunday and made landfall near Port Fourchon, LA, as a category 4 hurricane with maximum winds of 150 mph. As of this morning, the entire city of New Orleans was without power, and by storm’s end, a foot of rain could fall in the region.In anticipation of the storm, E&P companies had begun shut-in operations, with both 60% of gulf crude and 50% of gas production (~1.1 Bcf/day) taken offline. The energy complex does not rely on the gulf as the main source of production as in the past, but still represents 17% of the total U.S. oil output and 3% of gas. In anticipation of Ida, NYMEX reacted strongly on Friday as the September prompt month closed in its final day of trading at $4.37/MMBtu, the highest prompt close since December 2018 when it closed at $4.715/MMBtu.To reinforce the strength of last week’s move – the prompt month started the week at $3.851/MMBtu and finished up 51.9 cents, or 14%.When compared to a few months ago when June 2021 was the prompt, the entire month’s trading range was 22.3 cents!It’s clear that volatility is the name of the game, and until supply and demand fundamentals become more in balance, the volatility will likely stick around.

 

Market Update 08 30 2021

Market Settles 08 27 2021

 

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