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Daily Market Update January 8, 2021

Early Morning Update

The Feb21 natural gas contract is trading down $0.07 at $2.65.  The Feb21 crude oil contract is up $0.85 at $51.68. 

Summary

The NYMEX NG saw relatively no movement following the EIA report showing a 130Bcf withdrawal from storage. Despite being 15Bcf higher than the five-year average draw, the difference from the forecast of 135Bcf had been minimal and mostly accounted for and was not going to be reflected in market movement. However, some more concern among analysts and meteorologists is growing for a cold ending to January as polar vortex conditions are beginning to present themselves. This cold blast would grow in in the midcontinent and push east rather quickly. We have seen weather events like this several times in the last decade, and each time has led to having index prices for natural prices through the roof. What essentially is happening is demand sky rockets, but many production locations in the northeastern area will have to shut down when the cold literally freezes the rigs. This imbalance from supply and demand create price spikes that can break a budget in a single week. Manage your risk carefully, and keep an eye on weather.

 

Market Update010821

Market Settles 010721

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