Market Updates

Daily Market Update - May 16, 2016

Daily market update

Early Morning Update

The Jun16 natural gas contract is trading down $0.03 at $2.07.  The Jun16 crude contract is up $1.14 at $47.35.


Natural gas prices saw their largest drop in a week on Friday, as storage kept prices anchored to the downside.  The Jun16 NYMEX futures contract fell 5.9 cents, settling at $2.096/MMBtu to end the week.  After hitting a 17-year low in early March, natural gas prices have rallied more than 30%.  The rally, however, has sputtered recently, with last week marking the third straight week of losses for the June contract.  Week-over-week, prices lost just 0.5 cent, despite some daily changes as high as six cents.  The high volatility seen the past few weeks is a sign that the market is searching for direction, getting upward pressure from declining production while tethered to the downside by storage, with demand oscillating due to changing weather outlooks.  Data from the U.S Energy Information Administration showed the market was undersupplied last week by 3.4 Bcf/d, which would need to be maintained throughout the summer to avoid a storage glut come next winter.  However, last week’s demand got help from weather, boosting the undersupply.  Prices would have to continue to drop to incent demand enough to work off the oversupply of natural gas.

Market Update 051616

Market Settles 051316

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