Energy prices steady as consumption
begins to wane.
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The Oct-2023 NYMEX natural gas contract inched 0.3 cents higher to $2.608 per MMBtu as traders attempted to balance falling cooling demand against an expected narrowing of the storage surplus. The Oct-2023 WTI crude oil contract dipped 22 cents lower to $87.29 per barrel after the European Commission downgraded their 2024 economic outlook for the euro zone. Equity markets pushed higher on reports there was a consensus among Fed members to hold rates steady in their upcoming meeting.
Natural gas jumped 13.5 cents higher to $2.743 on a daily maintenance related drop in Permian basin production and the potential return of warmth for the eastern U.S. during the last third of the month. Crude pressed $1.55 higher to $88.84 after OPEC data revealed global markets could see a 3 million barrel per day shortfall next quarter due to Saudi Arabia’s output cuts. Equities struggled for traction ahead of wholesale and consumer inflation data released later in the week.
Natural gas bumped into upside technical resistance as traders looked ahead to the next day’s storage report, even though it was expected to highlight another below-normal injection. The prompt month contract closed 6.3 cents lower at $2.680. Oil settled 32 cents lower at $88.52 after the EIA reported a 4.0-million-barrel increase in oil inventories. Stocks were mixed on the day after consumer inflation jumped 0.6% in August to an annual 3.7% increase.
The cost of gas edged 2.8 cents higher to $2.708 after the EIA reported a 57 Bcf injection to storage, which narrowed the surplus compared to the 5-year average to 203 Bcf. Crude oil bounced $1.64 higher to $90.16 after the International Energy Agency said a market deficit would extend through the fourth quarter due to OPEC output cuts. Equities rallied even after a monthly read on wholesale inflation came in at its highest increase in fourteen months.
Natural gas settled 6.4 cents lower at $2.644 following a drop in feed gas deliveries at the Freeport LNG facility earlier in the week and as traders continued to assess the week’s storage report to gauge market tightness. Crude climbed 61 cents higher at $90.77 on continued concerns over a supply shortfall heading into the end of the year. Stocks lost ground on concerns the United Auto Workers strike against three major automakers would negatively impact the broader economy.
Supply and demand balances could begin to loosen as demand from the power sector declines with moderating temperatures.
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Jonathan Lee joined ENGIE Impact in 2009 and has produced the Energy Market Watch newsletter for 14 years. He manages the Energy & Sustainability Analytics Intelligence team, focusing on market intelligence and rate forecasting. Jonathan also has a background in Finance and Marketing.
Rick Margolin manages client projects towards the development of voluntary and compliance sustainability programs, evaluation of project opportunities, adoption, implementation and compliance. He also leads tracking of regulatory, legislative and policy environments for impacts on renewables and decarbonization markets.
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