Daily Market Update September 23, 2021
Early Morning Update
he Oct ‘21 natural gas contract is trading up $0.05 at $4.86. The Nov ‘21 crude oil contract is down $0.13 at $72.10.
Summary
fter several bouts of short-term volatility, participants in the natural gas market welcomed a relatively quiet trading session on Wednesday. Prices for both the 12- and 24-month strips advanced just shy of $0.02, closing at $4.258/MMBtu and $3.838/MMBtu, respectively.The slight day-over-day gains put an end to the market's four-day losing streak, during which the prompt and winter contracts weakened nearly $0.60.Surprisingly, the prompt month closed uncharacteristically flat at $4.805/MMBtu.It seems the current bullish and bearish fundamentals driving the October pendulum cancelled each other out, as recovering LNG exports were perfectly counterbalanced by cooler weather in the two-week forecast.However, the recent pricing stall may suggest a collective breath-holding as market participants await signals for a potentially bullish winter and fierce price rally.Following a hotter-than-expected summer, soaring LNG demand, and strained production, a severe winter would further weaken the already-bruised storage level. Inventories are currently sitting slightly above 3.0 Tcf, lagging roughly 16% and 7% behind both last year and the five-year average. Stakeholders are hopeful that stockpiles will rebuild throughout the fall, strengthening the market's trajectory towards the critical 3.5 Tcf pre-winter storage level. Today's EIA storage report for week ended September 17th is expected to announce an injection comparable to historical metrics, somewhere around 70 Bcf.
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