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Daily Market Update February 9, 2021

Early Morning Update

The Mar21 natural gas contract is trading down $0.07 at $2.81. The Mar21 crude oil contract is down $0.17 at $57.80.

Summary

NYMEX natural gas prices for the short term have become elevated over the last couple weeks due to elevated demand and concern over the cold arctic air that has settled over the majority of the country. The prompt month settled at $2.882/MMBtu yesterday, up another two cents. Surges in U.S. natural gas demand have increased levels by over 10 Bcf/d already, but are expected to grow another 10 Bcf/d over the next four days. The market price has reacted to the demand, but production has remained steady. However, weather shifts to the cold are expected to freeze over some of the drilling rig wellheads and can have seriously negative effects on production, especially in the northern regions. This will most likely have further drastic impacts on the index markets. This short-term impact has not seriously changed the longer-term NYMEX pricing, but the prices through Calendar 2022 has been creeping up slightly as a result of concern on long term storage levels. The cold has also been impacting energy prices and pushing up day-ahead pricing as the electricity market has been more reliant on natural gas for generation capacity as coal substitutions take place.

 

Market Update 02 09 2021

Market Settles 02 08 2021

 

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