Market Updates

Daily Market Update - May 2, 2016

Daily market update

Early Morning Update

The Jun16 natural gas contract is trading down $0.07 at $2.11.  The Jun16 crude contract is down $0.12 at $45.80. 

Summary

With natural gas production continuing to slide and rig counts at all-time lows, prices jumped 10 cents on Friday, with the prompt month settling at $2.178/MMBtu.  U.S. dry production is at 71.1 Bcf/d today, down 0.5 Bcf/d from weekend levels, and 1.7 Bcf/d lower than levels seen at the beginning of May 2015.  Total rig counts have been decreasing steadily since peaking at 1,931 in September 2014, making another sharp decline last week, falling 11 to reach a record low of 420, according to data from Baker Hughes Inc.  The current total rig count is 485 below last year at this time, and 1,511 less than the all-time high.  Most of the decline is due to a drop in oil rigs, which lost another 11 rigs in the week to Apr. 29.  Oil rigs are down 347 from the same week in 2015.  Natural gas only lost one rig last week, but the current count of 87 is the lowest number since record-keeping began in July 1987.  Natural gas rigs are down 269 from their peak in the week to Nov. 7, 2014, and 135 less than last year.  As concern grows that natural gas production will continue to decline, the market seems to be ignoring the huge amount of gas in storage and current mild temperatures.  If temperatures heat up to the point of bringing on early cooling demand, we can expect price rallies to follow.

Market Update 050216

Market Settles 042916

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