Daily Market Update August 31, 2022
Early Morning Update
The Oct ‘22 natural gas contract is trading down $0.06 at $8.98. The Oct ‘22 crude oil contract is down $2.24 at $89.40.
Summary
NYMEX natural gas prices moved lower during yesterday’s trading session following the September contract settle on Monday. The new prompt month, October, moved lower by 29 cents to close at $9.042/MMBtu. During the day, it had been below the $9 mark, along with all other months, except for January, but then moved back above prior to closing. The winter strip of November through March showed similar movement lower, dropping nearly a quarter on the day and the 12-month strip lost 44 cents (a stronger drop due to September dropping off the strip for Tuesday). Forward calendar strips shifted lower through 2024, while the further out strips were relatively flat, gaining just under a penny. The backwardation continues to stretch out through 2027, which is currently at $4.807/MMBtu. On the fundamentals side, domestic natural gas production fell yesterday from Monday, back to just below 96 Bcf/d, while total demand moved higher by a billion cubic feet, led by gains in the power burn and industrial demand sectors. As the month comes to a close, power burn demand for August has averaged 3.4 Bcf/d higher than last August.
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