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First Look - Natural gas surges on cooler weather outlook | Oil falls amid a stronger dollar

Oil is trading lower by nearly $2/Bbl as the US dollar continues to rally (As of 8:15 AM)
- The US dollar is up more than 5% since early October, with the rally further extending following last week’s US presidential election
  - A stronger dollar will usually lead to weaker crude prices
- Former Commerce Secretary Wilbur Ross said that Trump’s planned tariffs will likely exempt Canadian oil and gas, much of which is imported into the US
- WTI prompt spreads have fallen to the weakest level since June, implying a softer near-term market
Biden administration makes final SPR purchase as funding runs out (PGJ)
- The Biden administration bought 2.4 million barrels of oil for the Strategic Petroleum Reserve, depleting its purchasing fund
- The administration bought back 59 million barrels with an average price of less than $76 per barrel, resulting in a $3.5 billion profit
- SPR levels are currently about 390 million barrels, down from a peak of nearly 727 million barrels in 2009

Natural gas runs higher as weather models show a 21 HDD cooler forecast change from Friday
- The December contract was up 23c to $2.90 in Monday morning trading, while Cal 2025 gained 14c to $3.05
- The shift cooler was enough to edge average temperatures below the 10-year average in late November (Criterion)
A drop in gas supply has also supported this market
- Lower 48 production was modeled at 99.8 Bcf/d on Monday, down from a late October peak of 103.6 Bcf/d (S&P Global data)
- Most of the losses come from the Appalachia region, where supply is measured at 32.1 Bcf/d, a fall from the October peak of 35 Bcf
- TETCO M2 cash prices averaged $1.2/MMbtu in November so far, likely lending to curtailed gas among producers