Daily Market Update January 13, 2021

Early Morning Update

The Feb21 natural gas contract is trading up $0.04 at $2.79. The Feb21 crude oil contract is up $0.29 at $53.50.

Summary

The near-term NYMEX natural gas market was fairly active yesterday with the prompt month trading in an 18-cent range and being up as much as 12 cents in the morning. However, the intraday movement netted out to little overall day-over-day change as the February 2021 contract closed at $2.753/MMBtu, an upward movement of just 6/10 of a cent. The 12-month strip was similarly unchanged, while the calendar strip for 2022 gained 1.6 cents to $2.669. Calendar 2023 showed the most movement, as it gained three cents to close at $2.512. One of the things that may have contributed to the near-term movement yesterday is the uncertainty in the weather forecasts for the end of the month and whether or not the polar vortex will move over the Northeast. Natural gas production is continuing to hold steady near the 90-91 Bcf/d point, while total demand is projected to drop ~5 Bcf/d today, with the res/comm and power burn sectors leading the way as the milder temperatures are reducing heating demand. Tomorrow’s storage report is expected to show a pull of 121 Bcf, which would be 30 Bcf larger than last year’s draw and 30 Bcf less than the five-year average withdrawal.

Market Settles 01 12 2021