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Daily Market Update June 15, 2021

Early Morning Update

The Jul ‘21 natural gas contract is trading down $0.01 at $3.34. The Jul ‘21 crude oil contract is up $0.72 at $71.60.

Summary

Prices have continued their upwards trajectory, bringing the NYMEX Henry Hub prompt month up to $3.352/MMBtu after moving up $0.056/MMBtu yesterday. This upward movement has gone a full week of increasing settle prices, with last week's price starting at $3.070/MMBtu. A significant movement, to say the least, is being primarily attributed to short term and summer weather outlooks and how demand for natural gas has been impacted by a return to "normal" post COVID-19 lockdown. Further, LNG exports and natural gas exports to Mexico have been far above historical levels. Just last week, record levels for Mexican exports were achieved at 7.2Bcf/d. Last year, the level ranged between 5.2 and 5.4 Bcf/d. Mexican demand is being driven by power burn demand for cooling, similar to Texas and Californian markets, and increasing domestic demand for natural gas. In these U.S. markets, temperatures have been getting well above normal, creating high demand conditions. As a result, ERCOT had requested that Texans reduce their energy usage, since the renewable generation stack was low as a result of below-expected wind energy output.

 

Market Update 06 15 2021

Market Settles 06 14 2021

 

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