Market Updates

Daily Market Update - March 16, 2016

Daily market update

Early Morning Update

The Apr16 natural gas contract is trading down $0.02 at $1.83.  The Apr16 crude contract is up $0.56 at $36.90.

Summary

With little support from weather forecasts or storage projections, the Apr16 natural gas contract continues to find technical strength.  The prompt month traded as high as $1.898/MMBtu before eventually settling at $1.851, up 3.2 cents on the day.  In the National Weather Service’s 6-10 day outlook, warmer-than-normal temperatures prevail in the West, while cooler-than-normal temperatures dominate a large portion of the southeastern U.S. and the rest of the country remains neutral.  However, in the 8-14 day outlook, above-average temperatures blanket most of the country, bringing the possibility of early cooling demand.  Through March 3 when natural gas prices hit a 17-year low, the market had sunk 30% from its January high, but the low prices motivated traders to cover their bets that the market would fall.  The ensuing short-covering has lifted prices 13% since then, as the rally produced gains in seven of the last eight sessions.  Total U.S. dry production continues to struggle, with a 0.1 Bcf/d day-over-day drop to 71.7 Bcf/d today.  Despite this, the total natural gas supply is up 0.5 Bcf/d today to 76.9 Bcf/d, due almost entirely to a 0.6 Bcf/d increase in imports from Canada.

Market Update 031616

Market Settles 031516

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