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Daily Market Update September 06, 2022

Early Morning Update

The Oct ‘22 natural gas contract is trading down $0.39 at $8.39.  The Oct ‘22 crude oil contract is up $0.13 at $87.00.

Summary

Last week, the NYMEX natural gas prompt-month contract flipped from September to October as the September contract expired on Monday, 8/29, at $9.353/MMBtu, gaining 5.7 cents on the day.As October debuted as the prompt month, it lost 31 cents on the heels of lower power burn demand and incrementally higher natural gas production, which has been averaging above 96.6 Bcf/day, month-to-date. Generally speaking, higher prices for natural gas typically incentivize more natural gas production. However, market participants have been waiting to see that come to fruition this year, which has been more of a struggle than previous years.COVID-related supply chain and labor issues have hampered production plans, not to mention capital discipline. As we transition seasons, the fall and spring “shoulder seasons” have traditionally brought with them buying opportunities.Will that happen this fall?Time will tell, but market fundamentals remain stubbornly tight as we approach winter with a storage deficit.Last week’s EIA storage report was in line with expectations (+61 Bcf), but was still about 1 Bcf below the prior week’s injection (+60 Bcf).

 

Market Update 09 06 2022

Market Settles 09 02 2022

 

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