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Daily Market Update March 03, 2022

Early Morning Update

The Apr ‘22 natural gas contract is trading down $0.08 at $4.68.  The Apr ‘22 crude oil contract is down $3.10 at $107.50.

Summary

The natural gas supply and demand fundamentals remain tight as production struggles to crest above the 94 Bcf/d mark. The market saw demand, largely from the res/comm sector, rise yesterday due to colder temperatures in the Northeast and Midcon. As a result of the demand uptick and stagnant supply, the prompt month experienced another day of strong gains, rising $0.189 on the day, and settling at $4.762. Every month within the 12-month strip rose $0.15 - $0.19, and it wasn't until Q2 '23 that the monthly gains dropped down to around $0.05 for the balance of 2023. Unfortunately, the strength was not limited to the near-term because Cal '24 and beyond all gained $0.04 - $0.06, depending on the strip. It's seeming that the days of muted longer term movement may be behind us as the market struggles with very tight fundamentals, compounded with geopolitical fears of unpredictable and uncertain impacts from the Russian invasion into Ukraine. Adding more potential bullishness into the mix, the EIA is expecting a 135 Bcf withdrawal for the week ending Feb. 25 to be reported today, which is slightly larger than last week's 129 Bcf draw. If actualized, this withdrawal would yet again grow the deficit to the 5-year average and last year's levels, likely adding more market concern over end-of-season storage levels.

 

Market Update 03 03 2022

Market Settles 03 02 2022

 

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