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Daily Market Update September 26, 2022

Early Morning Update

The Oct ‘22 natural gas contract is trading down $0.19 at $6.64.  The Nov ‘22 crude oil contract is down $1.14 at $77.60.

Summary

After another brutal week on Wall Street, investors are looking for firm ground as inflationary pressures continue to ripple throughout the economy. As the Federal Reserve continued to pledge it will do what it takes to lower inflation to 2%, the S&P 500 dropped 4.6% for the week and is now 23% off the all-time high reached earlier this year on January 3rd.However, these steep drops have increased potential for a U.S. recession at some point in 2023, which sent the energy complex reeling as Brent crude oil dropped 6% on the week to settle below $85/bbl, and natural gas saw a sell-off across all terms.NYMEX calendar strips 2023-2027 all saw steep declines over 35 cents week-over-week, with terms hitting their lowest prices since mid-August.Notably, Cal ‘27 dropped below $4.50/MMbtu and continues to be the cheapest forward strip on the curve. On the power side, Q1 2023 power prices are also showing some signs of weakness with prices down modestly from their highs earlier this summer.While current prices continue to be significantly higher than previous years, this dip could represent a buying opportunity for those looking to add coverage for winter.

 

Market Update 09 26 2022

Market Settles 09 23 2022

 

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