Daily Market Update October 13, 2022
Early Morning Update
The Nov ‘22 natural gas contract is trading flat at $6.435. The Nov ‘22 crude oil contract is down $1.57 at $85.70.
Summary
The natural gas market closed lower after yesterday’s trading session, where the prompt month fell sixteen cents to settle at $6.435/MMBtu, and the 12-month strip dropped eight cents to finish at $5.733/MMBtu. Cals’23-’28 went mostly unchanged, closing lower by just two to six cents. From a fundamentals perspective, the supply and demand balance tightened after a drop in production. Supply weakened on the day as production fell nearly 1.0 Bcf/d, to bring total supply to 100.4 Bcf/d. On a week-over-week picture, supply is down nearly 2.0 Bcf/d. Demand rallied on the back of a 3.6 Bcf/d increase to Res/Comm demand. Total demand is at 92.8 Bcf/d today, as power burn fell by 0.5 Bcf/d. Bentek is projecting a 136 Bcf storage injection for the week ended October 7. An injection of this level would surpass any injection in over a decade. A 136 Bcf injection would shrink the storage deficit to within 210 Bcf of the 5-year average. Weather to end the week looks to bring above-average temperatures to the West, Texas, and the Northeast regions. Most of this heat will fade in Texas and the East next week, while maintaining in the West. The East will see below-normal temperatures next week, as well. The back half of October will bring broad, mild heat that will mostly subside to close out the month.
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