Daily Market Update February 09, 2022
Early Morning Update
The Mar ‘22 natural gas contract is trading down $0.19 at $4.06. The Mar ‘22 crude oil contract is flat at $89.36.
Summary
The majority of the country is seeing normal to slightly warmer-than-normal temperatures this week. Then, a strong, but brief, cold shot is expected for the East Coast, before returning back to bearish forecasts. The NYMEX natural gas futures price for March climbed a measly 1.6 cents on the day, settling at $4.248/MMBtu. LNG exports remain high, just over 13.0 Bcf/d, and are expected to remain near maximum capacity as both demand and global pricing remain high. Once Calcasieu Pass is fully commercial this summer, the U.S. will take the lead as top exporter of LNG globally, surpassing Australia and Qatar. As tensions escalate between Russia and the Ukraine, the UK remains concerned about supply in an already tight market. The U.S. and Germany have both said they would not support Nord Stream 2 should Russia attack. U.S. dry production has recovered quickly following storm Landon. After dipping down to around 85 Bcf/d last week due to wellhead freeze-offs from the cold, production levels are back up over 91 Bcf/d. End-of-season storage projections are concerning, following the cold start to 2022, with recent estimates plummeting down to just over 1.3 Tcf. Tomorrow, the EIA is expected to report the fourth consecutive weekly draw over 200 Bcf, which would continue to widen the current deficit to the 5-year average benchmark.
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