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Daily Market Update July 14, 2021

Early Morning Update

The Aug ‘21 natural gas contract is trading up $0.05 at $3.75.  The Aug ‘21 crude oil contract is down $0.05 at $75.20.

Summary

After reaching a 43-month high of $3.749 on Monday, the NYMEX prompt month natural gas contract backed off 5.3 cents yesterday, settling at $3.696/MMBtu for the day. Losses were felt through the curve during yesterday’s session, with the largest movement in the front months. Despite yesterday’s softening, overall U.S. natural gas demand (including exports) has outpaced supply increases throughout 2021. July 2021 natural gas demand has averaged an estimated 4.6 Bcf/d higher vs. July 2020, and supply is up an estimated 3.4 Bcf/d vs July 2020. Most of the demand increases are attributed to U.S. natural gas exports, via pipeline and LNG. With balance of 2021 and Winter 21/22 European and Asian market prices more than covering shipping spreads, the likelihood of U.S. natural gas exports backing off in the coming months is doubtful. On the supply side, natural gas production has seemingly been in a range of 90-92 Bcf/d all year, minus a handful of market events that dropped production lower than 90 Bcf/d. So far, producers have kept to their word of not oversupplying the market. However, with U.S. natural gas storage already at a deficit to the 5-year average benchmark mid-year, there could be potential for continued price volatility in the energy markets if fundamentals don’t shift.

 

Market Update 07 14 2021

Market Settles 07 13 2021

 

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