Daily Market Update September 12, 2022
Early Morning Update
The Oct ‘22 natural gas contract is trading up $0.09 at $8.09. The Oct ‘22 crude oil contract is up $0.71 at $87.50.
Summary
As we start a new week, NYMEX natural gas futures were a mixed bag last week as the near terms fell, but longer terms continued to show strength. The Cal 2023 strip fell 49 cents week-over-week to settle on Friday at $6.056/MMBtu. On the other hand, Cals 2025–2027 continued their slow but steady move higher as those strips set new all-time highs on Tuesday, but offered a slight pull back late in the week.These terms over the past 30 days are up an average of 35 cents about 9%.This is a trend worth watching over the coming weeks as uncertainty in Europe and upcoming winter weather forecasts could create diverging price trends compared to the strong bullish pattern we have seen across all terms recently.Looking at the trading spread between Cal 2023 and Cal 2024, July 1st was the smallest trading range between the terms of 29 cents, but quickly rose to hit a max spread of $1.38/MMBtu on Aug 23rd and have since moved tighter to a $1.00 spread with Friday’s close.This is something to continue to watch as the market backwardation that is present today can quickly evaporate if the near-terms continue to fall and longer terms continue to show strength.
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