Market Updates

Daily Market Update - April 8, 2016

Daily market update

Early Morning Update

The May16 natural gas contract is flat at $2.02.  The May16 crude contract is up $1.47 at $38.73.

 

Summary

The market rallied yesterday with the prompt NG contract finishing higher by $.107 to close the day at $2.018.  The EIA reported an injection of 12 Bcf, slightly higher than expectations but the market largely shrugged off the news.  The driving factor for the market yesterday was the decline in NG production.  Data shows that production continues to fall with the total now at roughly 71 Bcf/d, down from 74 Bcf/d in February.  The market largely viewed lower production as being inevitable given the drop in rigs and the persistent low prices, but the drop has happened perhaps faster than most thought.  Concerns that production is falling as demand is growing (exports via LNG and to Mexico).  Injection season will likely end with significant amount of gas in storage (near 4 Tcf?).  But will the market have to move higher to incentivize more drilling to meet the coming demand?

 

Market Update 040816

Market Settles 040716

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