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Jonathan Lee Senior Energy Market Intelligence Manager at ENGIE Impact
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Market Commentary | Week Ending 9/11

Natural gas retreats on a weaker cooling demand outlook.

Monday 9/7

Markets were closed in observance of the Labor Day holiday.

Tuesday 9/8

When trading resumed, the Oct-2020 NYMEX natural gas plummeted 18.8 cents to settle at $2.400 per MMBtu as the weather continued to point to weaker cooling demand in the Midwest and Northeast. The Oct-2020 WTI crude oil contract dove $3.01 lower to $36.76 per barrel on concerns over the global economic recovery after Saudi Aramco cut most of its prices for crude export to the U.S., Asia, and Europe for October. Equity markets sank lower after President Trump’s comments about decoupling the U.S. economy from China sent jitters through the market.

Wednesday 9/9

Natural gas gained 0.6 cents to $2.406 ahead of Thursday’s storage report, which was expected to show a build around 70 Bcf and would compare to last year’s 80 Bcf build and the 5-year average 67 Bcf build. Crude oil rebounded $1.29 to $38.05 as traders continued to assess the global economic recovery and the impact to demand for the commodity. Equities rebounded from a 3-day rout as investors looked to take advantage of cheaper stock prices, especially in the tech sector.

Thursday 9/10

Natural gas lost 8.3 cents to finish the session at $2.323 after the EIA reported a 70 Bcf injection into storage, which was in line with expectations and increased working gas in underground storage to 3,525 Bcf. The storage deficit to the five-year average also widened to 409 Bcf. Crude oil shed 75 cents to close at $37.30 after the EIA revealed a 2.0-Millionbarrel increase in oil inventories, a 3.0 Mb decline in gasoline stocks, and a 1.7 Mb decline in distillates. Equity markets traded in negative territory after new jobless claims came in at 884,000, compared to the 850,000 expected by market analysts.

Friday 9/11

Natural gas declined 5.4 cents to end the week at $2.269 as the weather forecast called for below-normal temperatures to stretch into the major consuming East in the coming six-to-ten-day period, dampening the late-season cooling demand outlook. Crude oil fluctuated between small gains and losses during the day’s session before settling 3 cents higher at $37.33. Equity markets landed in positive territory after European Central Bank President Christine Lagarde struck an optimistic tone regarding the eurozone’s economy.

Looking Ahead

Natural gas traders will continue to monitor the weather forecast for signs of increased late-season cooling demand.

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