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Daily Market Update January 20, 2021

Early Morning Update

The Feb21 natural gas contract is trading down $0.06 at $2.48. The Feb21 crude oil contract is up $0.72 at $53.70.

Summary

Presidential inauguration day is here, and all eyes in the energy market are on what the Day 1 actions will be. As noted yesterday, some of the promises include methane pollution limits, banning of new oil/gas leasing on public lands/waters, and rejoining the Paris Climate Agreement. Yesterday, FERC put all activities on natural gas projects on hold, including the Mountain Valley and PennEast Pipelines. The Feb ‘21 NYMEX natural gas futures price plummeted 19.1 cents on the day to settle at $2.546/MMBtu. Today marks the penultimate day that Feb ‘21 is the prompt month, and this dip is very similar to what we saw when January settled. Weather forecasts warmed significantly, causing concern for a Northeastern polar vortex to fade and the cold mostly short-lived. Warmer-than-normal temps dominate the middle of the country over the next couple of weeks. Tomorrow, the EIA is expected to report a very large withdrawal following the spike of cold felt last week, with estimates around 177 Bcf. LNG exports have dipped slightly, down from 11.0 Bcf/d to 10.4 Bcf/d due to some constraints down in the Panama Canal, delaying shipments to Asian markets that need the gas and where prices are significantly higher. U.S. Dry production is averaging just over 91.0 Bcf/d so far this month, slightly higher than December levels, but nowhere near the record highs of 94.0 Bcf/d back in late 2019.

 

Market Update 01 20 2021

Market Settles 01 19 2021

 

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