Market Updates

Daily Market Update - June 10, 2016

Daily market update

Early Morning Update

The Jul16 natural gas contract is trading down $0.02 at $2.59.  The Jul16 crude contract is down $0.72 at $49.84.

 

Summary

The NYMEX prompt NG contract saw it’s biggest one-day gain of the year as the market moved up $.149 to close the day at $2.617.  The market is now at its highest level since September 2015.  A continued slowdown in NG production and higher power burns led to a smaller than expected build into storage (+65 Bcf), and that caused the market to move up.  We are also seeing the Cal ‘17 priced higher than the Cal ‘18, which is higher than Cal ‘19.  NG production has slipped to 70.0 - 70.5 Bcf/d and seems to be showing more weakness every day.  Possibly mitigating the run-up in prices would be that gas prices are now higher than CAPP coal, which could cause a slowdown in power burns by reversing some of the coal-to-gas switching that we’ve seen.  It’s also possible that a higher NG market could cause production to rise, although that will likely take time.

Market Update 061016

Market Settles 060916

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