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Daily Market Update January 20, 2022

Early Morning Update

he Feb ‘22 natural gas contract is trading down $0.12 at $3.91.  The Feb ‘22 crude oil contract is down $0.46 at $86.50.

Summary

he prompt month experienced a sizeable sell-off of $0.25 yesterday and settled at $4.031/MMBtu. In fact, the balance of 2022 also lost $0.15 on average, and next Winter Dec '22-Feb '23 shed $0.10. It's an interesting move yesterday considering dry production has dropped down to 91.7 Bcf/d due to well head freeze-offs and total demand ticked up higher on the day to 124.3 Bcf/d. We still have very cold temperatures blanketing the entire eastern half of the U.S., and those cold temperatures look to be holding steady over the next 10 days. A strong cold front started to move through Texas yesterday, with the expectation for these cold temperatures to stick around through the weekend, and another cold front to push through Texas next week as well. Be on the lookout for potential index pricing volatility in the TX power market as a result of the very cold temperatures increasing demand on the grid. Looking beyond the next 10 days, weather forecasts have moderated along the East Coast, with a broader swath of warmer-than-normal temperatures in the South by the first week of February. Switching gears to natural gas storage, market participants are expecting a withdrawal to be reported today somewhere in the ballpark of 167 Bcf, which is larger than the 5-year average by about 24 Bcf.

 

Market Update 01 20 2022

Market Settles 01 19 2022

 

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