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Daily Market Update March 22, 2021

Early Morning Update

The Apr21 natural gas contract is trading down $0.05 at $2.48. The Apr21 crude oil contract is up $0.13 at $61.55.

Summary

The April ‘21 prompt month contract bounced around last week with two days’ worth of gains and three days of losses, ultimately closing the week down 6.5 cents. This will be the final week of trading for said contract, as it closes to settlement this Friday, March 26th. As for the calendar year strips, 2022, 2023, and 2024 all closed last week with losses of 3.9, 3.3, and 3.1 cents, respectively. Mild temperatures are expected to return for the balance of March, weakening demand from the residential/commercial heating sector. However, demand from LNG exports hit an all-time high on Friday, March 19th, at 11.8 Bcf/day, breaking the previous record of 11.6 Bcf/day from December 2020. What’s driving demand globally for LNG? Several factors, but lower spot prices at the Henry Hub help drive utilization rates at several export facilities in the Gulf Coast as U.S. LNG becomes more economic in both Asian and European markets. This example of price elasticity shows how the U.S. natural gas market is becoming more intertwined with global markets, and that trend could continue to grow as U.S. LNG export capacity grows over the next several years.

 

Market Update 03 22 2021

Market Settles 03 19 2021

 

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