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Daily Market Update December 02, 2021

Early Morning Update

he Jan ‘21 natural gas contract is trading down $0.11 at $4.15.  The Jan ‘21 crude oil contract is down $0.27 at $65.30.

Summary

hile the market outlook among analysts remains mixed, natural gas prices slumped for a third day as some participants expect a more elastic supply/demand balance this winter.The views of looser fundamentals for this winter are largely being driven by another round of warmer revisions to weather forecasts amidst record production.The 12-month strip, which currently coincides with the Cal ‘22 strip, lost $0.18 day-over-day and settled at $3.944/MMBtu.Last week, this same strip was priced $0.49 higher at $4.434/MMBtu. The Jan and Feb ’22 contracts heavily weighed down the strip’s average, each losing over $0.30.Cal ‘23 performed similarly in shape to ‘22, with the winter months losing nearly double the term’s day-over-day loss of $0.06. The bearish fundamental outlook lightly influenced prices beyond the ‘23 term, as prices in ‘24 and further only moved about $0.01.On the fundamental flipside, some analysts are skeptical that domestic or overseas forecasts won’t turn colder again over the coming weeks leading up to the winter demand peak.Thus, the valuation that the current selloff may be premature and excessive in a market ripe for another rally.Today’s market movement will likely hinge upon the EIA’s storage report for week ending Nov. 26.Bullish colder weather along the East Coast during the reporting period has contributed towards the wide range of withdrawal estimates, spanning from 34 to 64 Bcf, much above last year’s 4 Bcf withdrawal.The current storage level sits at 3.623 Tcf, 8% below last year and 2% below the 5-year average.

 

Market Update 12 02 2021

Market Settles 12 01 2021

 

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