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Daily Market Update September 02, 2021

Early Morning Update

The Oct ‘21 natural gas contract is trading up $0.01 at $4.63. The Oct ‘21 crude oil contract is up $0.76 at $69.35.

Summary

Wow! The bullish race is on in the natural gas market! The Oct '21 prompt month soared yesterday, gaining over 23 cents and settling out the day at $4.615/MMBtu. In fact, all of the near-term months reacted quite bullishly, with the Nov-Mar '22 strip gaining 22 cents, the 12-mo strip up 15 cents, and Cal '22 up 10 cents. With production dipping down to 87.9 Bcf/d yesterday, it's clear the market is growing increasingly more concerned about the tightening supply/demand balance. It’s unclear yet how long production may be impacted from Hurricane Ida, but hopefully the softening demand from more moderate temperatures will help ease the supply/demand balance. Current forecasts show a slightly cooler West and East, with only Texas running above normal this week, which should help alleviate demand and could offer some bearish sentiment to the market, especially if production rebounds. Unfortunately, one fundamental that has been steadily leaning to the bullish side has been storage. Last week we saw a very disappointing injection of 29 Bcf, and this week, the market is expecting just 19 Bcf to be reported. If this actualizes, it would trail the 5-year average benchmark by 34 Bcf and last year by 17 Bcf, which could lend more price support to near-term natural gas prices.

 

Market Update 09 02 2021

Market Settles 09 01 2021

 

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