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Daily Market Update September 23, 2022

Early Morning Update

The Oct ‘22 natural gas contract is trading down $0.10 at $6.98. The Nov ‘22 crude oil contract is down $2.72 at $80.77.

Summary

The prompt month fell sharply yesterday, trading down $0.69 to close the day with nearly a $6-handle, at $7.089. The EIA reported a very large injection of 103 Bcf, well above estimates. Following the large injection is the implication of a looser supply/demand balance, finally, as production continues its slow grind higher and cooler temps bring an end to the extremely high power burn demand levels. Power burns were in the upper 40 Bcf/d levels for long stretches of time as coal inventories are low and temps soared. But the power burn demand forecast for the next week is just 35.5 Bcf/d as temps (in the east anyway) moderate and demand falls. Production is steady at 96 Bcf/d but that is an increase from the summer levels of 94-95 Bcf/d and the expectation is we’ll increase from here. Add all of it up and the market sold off yesterday. Whether the trend continues will depend on further supply growth and continued mild weather as coal reserves are still very low and oil reserves (for power generation) in the northeast are also down, so with cold temps this winter, a tight market is still likely. The potential for volatility remains significant.

 

Market Update 09 23 2022

Market Settles 09 22 2022

 

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