Market Updates

Daily Market Update - June 1, 2016

Daily market update

Early Morning Update

The Jul16 natural gas contract is trading up another $.05 to $2.34.  The Jul16 crude contract is down $0.60 at $48.50.

Summary

Stagnant production growth and warmer weather helped boost natural gas prices yesterday, as the Jul16 futures contract rose 11.9 cents to settle at $2.288/MMBtu.  With above average temperatures in the western half of the country and rising temperatures in the Southeast, it is likely that demand for natural gas will increase significantly as we make our way through June and into summer.  Dry production had recovered slightly since hitting 70.3 Bcf/d last Tuesday, the lowest level seen so far this year, but is projected to be at 69.8 Bcf/d today, which would be a new low for 2016.  With demand on the rise and production unable to increase further to meet that demand, the supply-demand balance should tighten, shrinking storage surpluses even more.  As of May 20, natural gas inventories stand at 2,825 Bcf, about 37% more than last year or the five-year average.  However, the total of the next three storage injections is expected to be about 60 Bcf less than the five-year average, and over 110 Bcf less than last year for the same period.  Maintaining this trend, analysts are expecting a final end-of-season storage level of 3.9 - 4.1 Bcf, which is squelching concern that we will run out of storage capacity later this year.

Market Update 060116

Market Settles 053116

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