Daily Market Update February 02, 2022
Early Morning Update
The Mar ‘22 natural gas contract is trading up $0.52 at $5.27. The Mar ‘22 crude oil contract is up $1.01 at $89.21.
Summary
This winter shows that La Nina does not always mean warmth for the East! While December came in as the second warmest on record, it turned out that January has stolen the show, not in rank, but by coming in as the coldest January since 2014. After last month’s settle price, the hope for relief this month may be on hold until after the next couple of weeks as forecasts cool and production lags. The NYMEX natural gas futures price for March fell 12.3 cents on the day, settling at $4.751/MMBtu, however, it is skyrocketing this morning, up around 53 cents. The prompt month once again saw a wide trading range seeing pricing between $4.620/MMBtu and $4.974/MMBtu. LNG exports remain high, just over 13.0 Bcf/d, and Calcasieu Pass feedgas increases, getting ready for production at the site. Global LNG pricing continues to soar as demand increases due to cold and storage has not improved in Europe. US demand is expected to pick up this weekend as weather forecasts continue to cool for February adding upward pressure to near term NYMEX. U.S. dry production has dipped once again, averaging just over 90 Bcf/d for the start of the month following a brief uptick last week. Supply/demand fundamentals remain tight so far this winter increasing concerns for end of season storage levels. Following last week’s cold and the Nor’easter, the EIA storage report is expected to report another hefty withdrawal tomorrow, with estimates of around 270 Bcf, which would be the largest of the heating season so far. This would be much higher than the five year average benchmark of 150 Bcf, and would widen continue to widen the deficit in storage levels.
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