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Daily Market Update August 11, 2022

Early Morning Update

The Sep ‘22 natural gas contract is trading up $0.19 at $8.39.  The Sep ‘22 crude oil contract is up $1.57 at $93.50.

Summary

The natural gas market rallied yesterday as all futures settled higher on the day. The prompt month gained $0.37 to close out at $8.20/MMBtu. Although the prompt was up significantly, it is still down from a week ago. The 12-month strip closed at $6.73/MMBtu, a quarter higher day-over-day. Prices strengthened yesterday for the Cal ’23 strip by seventeen cents, and the Cal’24-Cal’28 strips were all up between three and five cents. The rally in natural gas prices can be attributed to high gas demand from the Midcontinent region and the demand expectation for early fall as the Freeport LNG facility is confirmed to resume operations. From a fundamentals perspective, the supply and demand balance has been unwinding as power burn demands fell sharply day-over-day. Total demand fell 2.6 Bcf/d yesterday, with moderate temperatures in the Northeast easing power burn demand. Domestic production weakened on the day, falling 0.3 Bcf/d to bring total supply to 99.6 Bcf/d. Bentek is projecting a storage injection of 40 Bcf for the week ended August 5, which would be 5 Bcf lower than the 5-year average. An injection of this amount would bring current stocks to 2,497 Bcf and remain at a deficit relative to last year’s levels for the same week. Over the next week, temperatures all along the East will be cooler than normal, while the West is expected see above-normal temperatures for most of August.

 

Market Update 08 11 2022

Market Settles 08 10 2022

 

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