Daily Market Update September 01, 2021
Early Morning Update
The Oct ‘21 natural gas contract is trading up $0.06 at $4.44. The Oct ‘21 crude oil contract is up $0.10 at $68.60.
Summary
Hold onto your hats, the market is off and running again as bullish fundamentals continue to dominate this summer. After last week’s disappointing storage injection, coupled with bolstered demand due to August heat for much of the eastern half of the country, the $4 support level has been surpassed by a long shot. The EIA is expected to report a measly 20 Bcf injection tomorrow, yet again, much less than the five-year average benchmark of 53 Bcf and widening the storage deficit as we head into the shoulder season. The NYMEX natural gas futures price for October saw an uptick of 7.2 cents on the day to settle at $4.377/MMBtu, and is up even more this morning. Just a couple of weeks ago, U.S. dry production had been increasing slightly, averaging 91.0 Bcf/d. However, due to Hurricane Ida, production levels quickly fell to 88.0 Bcf/d. Even though this dip in supply is concerning, there have been reports that there is minimal damage to the production sites, and we will hopefully see things rebound in the next few days. Demand is also taking a dip as weather forecasts have cooled a bit, showing more normal temperatures for the start of September for the majority of the country and rain covering much of the Northeast. Hopefully this weather pattern continues this month or we could be looking at an even tighter supply/demand outlook as we move closer to winter.
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