Daily Market Update October 04, 2022
Early Morning Update
The Nov ‘22 natural gas contract is trading down $0.01 at $6.46. The Nov ‘22 crude oil contract is up $2.17 at $85.80.
Summary
Yesterday, the NYMEX natural gas prompt month contract shed another 29.6 cents, to settle at $6.470/MMBtu.The sell-off was broad, as the longer-term calendar year strips also slid.Calendar year 2023 lost 7.6 cents, settling at $5.361/MMBtu while calendar year 2024 lost 10 cents to settle at $4.555/MMBtu.Crude oil prices went the opposite direction, as the Brent crude November prompt month contract gained 90 cents from Friday’s close, settling at $88.86/barrel. OPEC will meet on Wednesday this week to consider a production cut of 500,000 – 1.5 million barrels per day.On the natural gas fundamentals side, res/comm heating demand is projected to gain 0.5 Bcf/day today, mainly in the Northeast, while power burn demand is projected to rise in the Southeast by 3%, or 0.2 Bcf/day.Pipeline maintenance season is upon us, and, as such, dry natural gas production is off from recent highs of nearly 98 Bcf/day.Today’s projection is anticipating a drop in production of 0.7 Bcf/day.Lastly, Cove Point LNG in Maryland is expected go offline for maintenance for 21-23 days, based on historical maintenance seasons.This drops LNG feedgas demand below 11 Bcf/day.
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