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Daily Market Update June 21, 2021

Early Morning Update

The Jul ‘21 natural gas contract is trading down $0.03 at $3.18. The Jul ‘21 crude oil contract is down $0.04 at $71.60.

Summary

As the calendar rolls into the back half of June, the market continued its slow, but steady, climb over the past month. With the heart of summer approaching, traders are finalizing positions in light of today’s fundamentals picture, with above-normal temperatures dominating the western half of the country, stagnant natural gas production, and storage below historical averages. Despite the bullish fundamentals outlook, near-term NYMEX forwards were down week-over-week, with Q3 ‘21 and Q1 ‘22 both down a nickel, trading at $3.22/MMBtu and $3.37/MMBtu, respectively. On the power side, regional markets were mixed, with marked volatility in ERCOT, a strong sell-off in CAISO, and eastern markets largely flat for the same terms. If looking for value in the forward natural gas market, Cal ‘26 is currently the lowest priced forward at $2.663/MMBtu, with Cals ‘24 and ‘25 right behind at $2.671/MMBtu. One item that bears watching is the continued trend of supply outplacing production. Compared to June 2020, demand with exports is up 8.0 Bcf/d, while supply is up 4.0 Bcf/d. With a supply deficit clearly in play and potential for a warmer-than-normal summer, storage injections could continue to disappoint over the coming months.

 

Market Update 06 21 2021

Market Settles 06 18 2021

 

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