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Daily Market Update July 27, 2021

Early Morning Update

The Aug ‘21 natural gas contract is trading down $0.07 at $4.03  The Sep ‘21 crude oil contract is up $0.09 at $72.00.

Summary


The natural gas market has seen some crazy movement in the last 24 hours. By 10am EST yesterday, prices for the NYMEX August contract shot up by $0.18/MMBtu, then quickly fell to -$0.02 by 11am. However, prices moved up once again and ended settling around $0.04 higher at $4.102/MMBtu. Needless to say, the market is seeing some extreme volatility leading up to the last few trading days of this prompt month. It would be fair to say that this could be a result of fear-based trading. The prompt month settled above the $4.00/MMBtu mark for the first time since December of 2018. This technical ceiling was believed to be a much stronger line than it turned out to be, and with the prompt ultimately settling on Wednesday, there are likely some players who decided to bite the bullet to try to beat the competition in this bullish market. On a more optimistic note, higher prices generally incentivize production, and, while current forecasts for injections are predicted to be smaller than average, producers are more likely to pick up their levels before withdrawal season comes. The caveat that prices must remain at these levels or above to incentivize long term production is still a bit worrisome for market buyers.

 

Market Update 07 27 2021

Market Settles 07 26 2021

 

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