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Daily Market Update September 29, 2021

Early Morning Update

he Nov ‘21 natural gas contract is trading down $0.18 at $5.70.  The Nov ‘21 crude oil contract is down $0.49 at $74.80.

Summary

or the majority of this year, market fundamentals and pricing have been the mirror opposite of 2020. Earlier in the day yesterday, the NYMEX natural gas futures price for October broke through the $6/MMBtu technical level and traded up to as high as $6.28/MMBtu. The prompt month ultimately rolled off the board up 13.5 cents on the day to settle at $5.841/MMBtu. If we compare that to last year’s settle price at $2.579, it more than doubled. There are still many concerns for the upcoming winter, as production in the Gulf has been slow to recover following Hurricane Ida, and demand remains high. U.S. dry production has seen a slight recovery since the storm earlier this month, averaging 89.0 Bcf/d over the past week, but still much lower than the 91.0 Bcf/d day levels we saw this summer. While supply is still down, LNG exports have recovered after the storm, back up to around 10.5 Bcf/d. These exports are expected to increase at the beginning of withdrawal season due to an additional export train at Sabine Pass coming on line, and the fact that global economics and demand are high right now for U.S. LNG. The EIA is expected to report an injection of around 87 Bcf, which would be the fourth largest build of the season. This would be much higher than the five-year average benchmark of 72 Bcf, which will narrow the deficit in storage to 214 Bcf. Hopefully throughout the rest of the shoulder season we see more of these larger injections to help close the gap as we head into winter.

 

Market Update 09 29 2021

Market Settles 09 28 2021

 

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