Daily Market Update August 18, 2022
Early Morning Update
The Sep ‘22 natural gas contract is trading up $0.04 at $9.28. The Sep ‘22 crude oil contract is up $1.89 at $90.00.
Summary
Yesterday, the natural gas market shed some of the gains made from the day prior, as futures were down slightly as a result of declining demand in the Northeast and South. The prompt month settled nine cents lower on the day, yet remains up close to a dollar from the start of the month. The Cal ’23 strip closed marginally lower while up $0.67 since August 1st. Cals ’24-’28 followed the same movement, all settling lower on the day. From a fundamental perspective, supply saw gains, while demand fell day-over-day. Supply grew by 1.4 Bcf/d to break through that 100 Bcf/d total supply level again after falling short the last two days. U.S. Demand fell 0.6 Bcf/d on the day, mostly due to power burn demand declining 1.2 Bcf/d with some offset coming from the res/comm sector. However, total demand was flat on the day, as exports grew by 0.6 Bcf/d. Bentek is expecting a 29 Bcf storage injection for the week ended August 12, which would be significantly lower than the 5-year average, as well as the same week last year. For an injection of this level, current stocks would fall 356 Bcf short of the 5-year average, allowing the storage deficit to continue. Weather patterns for August show temperatures in the Pacific Northwest being well above normal, while most of the South will experience cooler-than-normal temperatures. Next week, the Northeast temperatures will heat up slightly above normal, but will subside by the end of the month.
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