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Daily Market Update January 6, 2021

Early Morning Update

The Feb21 natural gas contract is trading down $0.02 at $2.68. The Feb21 crude oil contract is up $0.07 at $50.00.


The NYMEX natural gas prompt month contract continued its rally yesterday, trading up twelve cents to close the trading day at $2.702/MMBtu. However, early morning trading portends a potential reversal to the multi-day rally, as the NYMEX prompt month contract is currently down a couple pennies. Fundamentals remain relatively static. Production is hovering around 90 Bcf/d, exports continue to be strong, industrial demand is making a comeback, and heating demand is relatively normal for this time of year. One piece of news that came out yesterday was a surprising cut to oil production. During OPEC+ meetings, Saudi Arabia unilaterally chose to cut oil production by an extra one million barrels per day. As other OPEC+ members will increase their output, Saudia Arabia plans to hold their production to 8.125 million bbl/d, well below their allotted quota of 9.119 million bbl/d. As such, Brent crude prices, the global benchmark, rallied nearly 5% yesterday, closing at $53.60/bbl. This bullish news for crude could lead to higher oil and natural gas production in the Permian shale region of West Texas, a large source of associated natural gas production.


Market Update 01 06 21

Market Settles 01 05 21


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