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Daily Market Update July 22, 2021

Early Morning Update

The Aug ‘21 natural gas contract is trading down $0.03 at $3.93.  The Sep ‘21 crude oil contract is up $0.15 at $70.45.

Summary

The Aug '21 natural gas contract is quickly approaching the $4 mark as it saw another day of gains yesterday, settling up eight cents at $3.959/MMBu. The upward movement trickled out to the 12-month strip, which gained seven cents, as well as Cal '22, which bumped up a nickel day-over-day. As the market continues to tighten and gas prices rise, we have yet to see producers react to the higher natural gas prices. It appears that producers are remaining disciplined and holding tight to capital expenditure cuts, despite the steadily rising gas prices. The market seems to be in limbo, teetering at these new higher levels until one of the fundamentals shift enough to cause a change. One fundamental that's really created price strength, particularly for this winter, is natural gas storage. The deficits to the 5-year average and to 2020 continue to grow since injections into storage have been steadily trailing historical levels. The lackluster injections are largely driven by tightening supply levels and increasing demand. This week, market participants are expecting to see an injection in the ballpark of 49 Bcf to be reported by the U.S. Energy Information Administration for the week to July 16. If this actualizes,  it would actually be higher than the 5-year average by 13 Bcf.

 

Market Update 07 22 2021

Market Settles 07 21 2021

 

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