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Daily Market Update October 25, 2021

Early Morning Update

he Nov ‘21 natural gas contract is trading up $0.30 at $5.58.  The Dec ‘21 crude oil contract is up $1.04 at $84.80.

Summary

s we head into the last week of October, the story of volatility remains the headliner in the market.Despite above-normal temperatures in the forecast and a stronger-than-expected storage injection last week, the market continued to move higher on Friday, with the prompt closing at $5.28/MMBtu.One area that has shown recent sneaky strength is the longer term NYMEX strips.If you look at prices since October 1st, Cal 2022 is surprisingly only trading two cents higher at $4.35/MMBtu, but longer dated terms (2023–2030) are up steadily, averaging 13 cents higher over the same span.These years continue to be backwardated, with the cheapest being Cal 2026 at $3.11/MMBtu and Cal 2023 being the most expensive at $3.60/MMBtu, but, notably, all these have steadily traded over $3 for most of October. What may be causing this price rally?Some large gas producers have stated to Wall Street that prices must be sustained over $3 for them to grow production. Now that prices have reached those levels for almost a month, will these producers increase activity, or, because prices have moved so quickly, will they continue to hold firm and wait for higher prices? Their action or inaction will continue to be one of the main drivers of long term NYMEX price movements.

 

Market Update 10 25 2021

Market Settles 10 22 2021

 

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