Daily Market Update July 08, 2022
Early Morning Update
The Aug ‘22 natural gas contract is flat at $6.29. The Aug ‘22 crude oil contract is down $0.37 at $102.36.
Summary
After a disappointing storage report, the market rallied sharply yesterday, closing higher by $0.787 to finish the day above $6 at $6.297. The market had been expecting a build in the low 70’s, but when the EIA reported a build of just 60 Bcf, the market interpreted that as the market being much tighter than expected and the market jumped. We had been seeing indications that production was ticking higher, and with Freeport still offline, gave hope of a looser balance. But strong demand from power generation and very high temps across much of the country kept the build very low. We are also seeing LNG prices continue to move higher, which is impacting the ISO-NE markets, especially winter. That market has seen sharp price increases this week. We’re also seeing high heat and humidity levels across much of the mid-con region, which is keeping index prices elevated. Texas is seeing extremely high demand levels and may set an all-time demand record today or next week. Pricing is high accordingly.
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