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Daily Market Update June 17, 2021

Early Morning Update

The Jul ‘21 natural gas contract is trading down $0.03 at $3.22. The Jul ‘21 crude oil contract is down $0.30 at $71.85.

Summary

After Tuesday’s large and mechanically driven selloff, strong and steady natural gas fundamentals regained their ground and pushed short-term contracts higher during Wednesday’s trading session. Virtually every contract within the 12- and 24-month strips advanced just over $0.010/MMBtu, as above-normal highs through early July continue to dominate eastern and western weather forecasts. The prompt contract settled $0.011 higher to $3.251/MMBtu, while the August and September contracts both strengthened by $0.015, settling at $3.271 and $3.259/MMBtu, respectively. Futures prices for the upcoming ‘21/’22 winter strips are still hovering around $3.50, each contract holding a nearly $0.50 premium over every other winter strip on the curve. Bullish LNG demand, lower production, and the current storage deficit are the likely drivers behind the this winter’s large premium. Unfortunately, the strong winter pricing is unlikely to weaken this week, as both the Bloomberg and Reuters injection polls ranged from about 64 to 76 Bcf for today’s Energy Information Administration (EIA) storage inventory report. An injection within these ranges would increase the current storage deficit, as they are below both the 87 Bcf five-year average and last year’s 86 Bcf builds. Storage levels are currently on pace to end injection season about 200 Bcf behind the five-year-average.

 

Market Update 06 17 2021

Market Settles 06 16 2021

 

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