Daily Market Update July 21, 2021
Early Morning Update
The Aug ‘21 natural gas contract is trading up $0.03 at $3.91. The Aug ‘21 crude oil contract is up $1.20 at $68.40.
Summary
Yesterday, the NYMEX natural gas futures price for August moved up 9.7 cents to settle at $3.876/MMBtu. With bullish fundamentals holding strong this summer, a $4 prompt month price doesn’t seem too far out of reach now. Temperatures have moderated for the majority of the country. However, forecasts have once again started to warm for the East down into Texas toward the end of this month into August. OPEC’s decision to increase production dampened crude oil pricing, once again creating concern for domestic natural gas production in an already tight market. U.S. dry production dropped below 90 Bcf/d today, and any further dip in supply could lead to the widening of the deficit to the five-year average benchmark in an already bullish storage outlook. Concerns for end-of-season storage levels remain, and winter pricing continues to reflect that concern, as Jan ‘21 NYMEX pricing is currently over the $4 threshold. LNG exports dipped slightly to 9.5 Bcf/d, but exports to Mexico are strong at 6.7 Bcf/d. The bearish news of the larger-than-expected storage injection reported last week seems to have been very short-lived, but slightly larger injections due to the mild temps over the next couple of weeks are possible.
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