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  Weekly Market Update
December 8, 2017
  Natural Gas

Since opening as the prompt month at $3.131/MMBtu, January 2017 futures have taken over a 30 cent dive; over 10 cents of which came yesterday.

Yesterday the EIA announced a 2 Bcf injection of gas into storage which added more downward pressure to the market. This is the first injection of the heating season to occur since 2012.

Real time power prices dipped a little bit lower this week pulling the 30 day average below $25/MWh.

Electricity futures continue to follow the natural gas market and are down from last week. The 24 month strip is now back below $30/MWh at $29.27/MWh as of Wednesday's close
  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.
Shale gas production in the Appalachia region has increased rapidly since 2012, driving an overall increase in U.S. natural gas production. According to EIA’s Drilling Productivity Report, natural gas production in the Appalachia region—namely the Marcellus and Utica shale plays—has increased by more than 14 billion cubic feet per day (Bcf/d) since 2012. Overall Appalachian natural gas production grew from 7.8 Bcf/d in 2012 to 22.1 Bcf/d in 2016 and was 23.8 Bcf/d in 2017, based on EIA data through October 2017. Drilling wells in the Appalachia region has become very productive. The average monthly natural gas production per rig for new wells in the Appalachia region increased by 10.8 million cubic feet per day since January 2012. EIA attributes this increase to efficiency improvements in horizontal drilling and hydraulic fracturing in the region, which include faster drilling, longer laterals, advancements in technology, and better targeting of wells. The Marcellus shale extends from New York in the north to Kentucky and Tennessee in the south and is the most productive natural gas-producing formation in the Appalachian Basin. The formation's footprint covers about 95,000 square miles. Dry natural gas wells in the Marcellus are mostly located in the eastern portion of the play, and liquids-rich wells are typically located in the western portion.

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  NOAA 8-14 Day Outlook
  NOAA 30 Day Outlook