Market Updates

Daily Market Update - May 17, 2016

Daily market update

Early Morning Update

The Jun16 natural gas contract is trading up $0.03 at $2.06.  The Jun16 crude contract is up $0.13 at $47.85.

Summary

In this week’s opening session, June natural gas futures fell another 6.7 cents, settling at $2.029/MMBtu.  Below-normal temperatures in the East are finally warming up as temperatures in the West cool off, which should help diminish lingering heating demand, as well as early cooling demand.  After getting off to a slow start, the lack of demand would likely trigger a boost in storage injections.  However, the next three storage injections are still projected to be far below historical averages due to declining production, which should help to alleviate concerns about running out of storage capacity by the end of the summer.  U.S. dry gas production sank 1.2 Bcf/d day-over-day, with today’s projection at 70.3 Bcf/d, marking a new year-to-date low.  Without a hot summer to keep storage injections in check, natural gas prices will probably remain low to help slow natural gas stockpiling.  Morgan Stanley noted that the Canadian natural gas market is also oversupplied, and is actually cheaper than domestic gas in some regions.  If this continues, we may see an influx of imported natural gas this summer, which should also help to keep prices at bay.

Market Update 051716

Market Settles 051616

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