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Daily Market Update August 01, 2022

Early Morning Update

The Sep ‘22 natural gas contract is trading down $0.35 at $7.88.  The Sep ‘22 crude oil contract is down $3.12 at $95.50.

Summary

The La Nina summer is playing out as expected, with temperatures coming in significantly above normal in the PacNW and TX, but with some periods of elevated temperatures in the East. The western U.S. has seen numerous weather records fall, including Seattle, WA, which set an all-time record of consecutive days above 90 degrees, and Austin, TX, where the average July temperature was over five degrees hotter than normal.These temperatures have pushed gas demand for power generation higher than previous years, despite the high natural gas price environment.The only area that has seen improved drought conditions in the month was the Mississippi River Valley – MO, AR, and eastern TX.Remaining areas in the western U.S. continue to see high levels of extreme and exceptional drought, including west Texas and California.On the production front, despite high NYMEX prices and steadily growing rig counts, production has only seen a modest increase throughout the month. For the last week in July, the 7-day average reached 95.2 Bcf/d, which actually represents a 7-month high.On the flip side, demand totals for the first three weeks in July were the highest weekly July demand dating back to 2005, according to Bentek. June saw a sharp decline in natural gas prices, but July saw a whiplash effect with prices moving back up.Clearly, if the fundamentals that we saw in July continue into August, the market could be in for another bumpy month.

 

Market Update 08 01 2022

Market Settles 07 29 2022

 

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