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Natural Gas up 17 cents

August 3, 2020

After a week of relatively quiet markets in both Gas and Oil, Natural Gas is up significantly to start the first week of August. Spot is up 17 cents, but Winter proxy January 2021 is up only 7 cents. Warmer forecasts are driving up the front of the curve, but more importantly, the threat of Congestion in the Marcellus will wane if there is enough demand here to finish Summer. RBN Energy just came out with a blog post this morning discussing the chances of congestion in the Northeast during the shoulder. Traders are obviously relieved that higher temperatures will pull enough gas to reduce regional supplies and ease potential bottlenecks.

 

Updating this post, with spot Gas up 33 cents, it is clear that traders were poorly positioned. We suspect there was a large short October/long January position that is being unwound. January 2021 is up 11 cents, a nice move, but 22 cents behind the advance in front Summer 2020 contracts.



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