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Daily Market Update August 10, 2022

Early Morning Update

The Sep ‘22 natural gas contract is trading up $0.01 at $7.84. The Sep ‘22 crude oil contract is down $0.40 at $90.10.

Summary

Natural gas pricing continued its volatile trend yesterday as the September prompt month rose 24.4 cents on the day to settle at $7.833/MMBtu, just over ten cents higher week-over-week. The market is seeing some welcomed relief following this week’s heat as August weather forecasts moderated for the East Coast over the next couple of weeks, helping alleviate concern that we would see weather forecasts come in similar to the past two months. Power burn levels have already begun to dip as temps cool off. U.S. dry production has averaged just over 95.2 Bcf/d, a slight decrease from the prior week’s average of 95.4 Bcf/d, but still hovering just below pre-pandemic levels. Last week, Mountain Valley Pipeline received some much needed support as Biden announced that he is backing the completion of the pipeline that is already 95% built, which would bring added capacity from the Northeast into the Southeast of about 2.0 Bcf/d. The increase is much needed as the South has seen record-setting demand so far this year, despite the fact that Freeport LNG is offline. Freeport is expected to return sometime in October, which would increase export capacity by around 2.0 Bcf/d. Tomorrow, the EIA is expected to report an estimated 39 Bcf injection into storage, a near miss from the 5-year average benchmark of 45 Bcf. Unfortunately, due to the hot summer, inventory levels to date have not improved and summer is not over just yet. End-of-season estimates are hovering around 3,450 Bcf.

 

Market Update 08 10 2022

Market Settles 08 09 2022

 

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