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October 4, 2018
Natural Gas

November 2018 futures contracts have climbed 25 cents in the last week to $3.23/MMBtu. Storage levels and weather outlook being the main drivers.

Today's storage injection of 98 Bcf gave a bit of relief to the market, currently down about 4 cents after being down as much as 9 cents.

Cheap power prices in the real time market have brought the 30 day average down over $5/MWh from last week.

The 12 month electric futures strip is still making its way towards $34/MWh, up another 11 cents from last week. The 24 month trailing by $1.45.
12 & 24 Month NYMEX Strip
12 & 24 Month Zone A Power Strip
This document is intended for indicative purposes only. All information contained within this report is acquired from third party sources and EnergyMark makes no representations or warranties, express or implied, as to the accuracy of the information provided herein. EnergyMark is not liable for any actions or decisions made in reliance on the information provided in the report.

Despite the Autumn shoulder season being in full force, natural gas prices have been continuing their rise, with prompt month prices up 34 cents, or 12%, to yesterday's close at $3.24 per MMBtu since September 19. We've blown past important technical resistance at $3.19 and $3.23. These are the highest prices since the end of January.
The start of the rise up was really triggered by forecasts that showed a potential cold outbreak in the high demand regions of the East and Midwest to start this month. This hasn't exactly materialized: it's gas used for electricity that's up 17% over the past week, with Residential/Commercial demand declining.
With winter just five or so weeks away, the market is realizing that we will go into winter with the lowest gas storage since 2003, perhaps just 3.25 trillion cubic feet, well below the 3.8 Tcf that we saw last year. The rise up was to be expected since such low storage numbers yet still low pricing made clear that gas has been a greatly undervalued commodity.
U.S. gas production continues to hit record highs, now at nearly 84 Bcf/d, versus 75 Bcf/d this time last year. Rising production could be the additional supply needed to compensate for a lack of gas in inventories.

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NOAA 8-14 Day Outlook
NOAA 30 Day Outlook

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