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Daily Market Update July 20, 2021

Early Morning Update

The Aug ‘21 natural gas contract is trading up $0.04 at $3.82.  The Aug ‘21 crude oil contract is down $0.12 at $66.30.

Summary

The natural gas prompt month moved up more than $0.10/MMBtu yesterday during a very bullish trading session. Though the market was flat last week, yesterday's trades wiped out the bearish nature that affected every contract that traded. A potential factor to the bullish movement could be the decisions made in the crude oil market by OPEC+ in the last few days. Essentially, the next few months will see an increase of oil production following a constrained market. An increase in supply had the expected effect, and prices for crude oil had fallen by over $5.65/Bbl yesterday. The price movement caused oil to settle at $66.42/Bbl, when prices were over $10/Bbl higher just a month ago. With declining oil prices, domestic production will most likely fall. Associated gas could be affected as a result, potentially stressing the supply of natural gas even further. All of the other fundamentals have stayed relatively stable. Natural gas demand for the power burn sector has decreased, primarily due to the temperature decreasing to more normal levels. However, the exports through LNG terminals and pipelines to Mexico have more than made up the difference, stressing the whole market with extra volatility through the 12-month strip.

 

Market Update 07 20 2021

Market Settles 07 19 2021

 

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