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Weekly Energy Market Update April 28, 2014

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Below is the Direct Energy Business Weekly Energy Market Update video for April 28, 2014. We embedded this video right into the blog post, so you don’t have to leave this page to view it. The written summary is still below too.

The following is a summary of last week’s market activity and the market outlook.

The big story remains storage and the huge deficit. Futures remain near the high end of their recent range, with the May contract up $0.40 since April 1.

It’s now expected that there will be a significant storage deficit going into next winter, but the question is how much?

May futures expire today – already up $0.10 back to near recent highs:

NG May 14:         4.64       -0.10
12-Month:           4.68       -0.08
NG CAL 15:          4.35       -0.05
NG CAL 16:          4.26       +0.01
NG CAL 17:          4.33       +0.01

Near-Term: The market is now focused on storage replenishment, and that concern has clearly provided impetus for the recent rally to the top of the two-month price range. The storage deficit will limit downside, but the question also remains about upside limits.

Long-Term: Discounts versus near-term remain in place with the curve backwardated through calendar 2016. Take advantage of any dips, when possible, but don't be greedy. Consider regional anomalies, especially for Northeast winters and Texas summers.

Posted: April 28, 2014