Daily Market Update December 15, 2021
Early Morning Update
he Jan ‘21 natural gas contract is trading up $0.12 at $3.87. The Jan ‘21 crude oil contract is down $0.63 at $70.10.
Summary
ith warmer-than-average temperatures persisting through the mid-continent and eastern United States, total natural gas demand continues to slide from the recent highpoint set during the first week of December. Total demand for yesterday came in at just under 108 Bcf/d and is projected to fall ~3 Bcf/d today, which compares to the 124 Bcf/d mark that was hit last Tuesday. The majority of the drop has come from the res/comm sector due to the mild temperatures and has dropped 11.4 Bcf/d in the past week, while the power burn sector comes in second, having fallen 5.6 Bcf/d in the same time frame. On the production side, total dry production continues to hold above the 94 Bcf/d mark, with the month-to-date average right at 94.5 Bcf/d. The growth in production is most apparent when comparing to the year-to-date average, which sits just above 91 Bcf/d. Natural gas pricing slid during yesterday’s trading session out through the curve to early 2024, with the prompt month falling 4.7 cents to $3.747/MMBtu, and the remaining winter strip dropping five cents. Cal strip ‘22 dropped 6.8 cents to $3.69, and 2023 fell 3.6 cents. The backwardation stretches to 2027, which is now at $3.03. Further out the strip, pricing turned higher, especially in the outer years of 2029-2034, which all gained just under 12 cents.
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