Early Morning Update
The Sep18 natural gas contract is trading up $0.01 at $2.77. The Sep18 crude contract is down $0.31 at $67.35.
The September NYMEX natural gas futures contract continued it’s descent for the third straight day yesterday, settling at $2.758/MMBtu after losing 2.4 cents. The 2020 calendar strip reached its lowest level ever on Wednesday, as well, settling at $2.60. Normal temperatures have been creeping into weather outlooks in the Southeast and Midcontinent, offering some possible respite from the hot weather which has been pushing power burns to record levels. A survey of market analysts shows an expectation of a 45 Bcf injection to be reported by the U.S. Energy Information Administration this morning for the week ending July 27. Despite current storage levels being at a 20% deficit to the five-year average, the market does not seem too concerned with end-of-season natural gas inventory levels. Record production should lead to higher storage builds in August and September, thus narrowing the historical deficiency. The market is projecting storage stockpiles to be around 3.47 Tcf before winter withdrawals begin.