Summer has finally arrived; and with it, a flurry of recent market volatility, storms, potential system peaks, and intermittent blackouts. Perhaps it was the pleading voices of the bull camp eager to see cooling demand ratcheting up that led to the sudden and extreme heat; or perhaps the multiple airings of “The Sandlot” have forced summer to rear her head. More than likely, however, it is a result of La Niña influences interacting with high-pressure atmospheric conditions to create a “heat dome” over much of the country. On the heels of speculative trading activity regarding the potential impacts of Hurricane Barry making landfall in Louisiana, natural gas futures prices have risen and fallen throughout July, but the August contract has remained range-bound to $2.25-$2.40 per MMBtu. There is a bit of short-term cooling relief anticipated over the next few days, which should help to keep a lid on any significant price rally. In contrast, the following weeks are likely due for some more extreme and extended heat to settle in once again across most of the country, and therefore we may see some technical resistance levels (currently around $2.30) being tested.
Other important energy news.
- In 2018, the amount of natural gas in storage rose to a high at 3.247 tcf in November. To reach that level, stocks will need to rise by an average of 42.1 bcf over the next 17 weeks.
- Next EIA report to be bullish with another below-average build amid current heatwave over much of the country; ~150 million people under Heat Advisory/Warning.
- The January 2020 contract fell to $2.654/MMBtu—its lowest price in three weeks and within pennies of its all-time low close of only $2.605/MMBtu.
To learn more about these developments and to get the latest prices, trends, data highlights, and temperature probabilities, read the full energy update.
If you have any questions, Gary Graham, director of energy management, can take you through the report.