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Daily Market Update April 25, 2017

Early Morning Update

The May17 natural gas contract is trading down $0.01 at $3.06.  The May17 crude contract is down $0.13 at $49.10.

Summary

Amid reports of slipping demand and rising rig counts, the May17 natural gas contract lost 3.5 cents on Monday to settle at $3.066/MMBtu. This was the prompt month’s lowest settlement since March 27, and it has shown losses in the last five out of six sessions. The 2018 calendar year moved less than a cent down, to $3.108, and years 2019 through 2023 dropped between one and two cents. These outer years remain trading between $2.90 and $3.00. Total gas demand is down 7.0 Bcf/d this year compared to 2016, led primarily by weather-related residential and commercial demand. Weather reports are predicting above-average temperatures for the eastern portion of the country in the 6-10 day forecast, eliminating any leftover heating demand. In addition to waning res/comm demand, the Baker Hughes natural gas rig count increased by five this week to 167 total in operation for the U.S, pointing to a potential increase in production over the coming summer months. The recent selloff can also possibly be a market correction to the swell in bullish positions that hit 10-year highs during the week of April 18th.

Market Update 042517

Market Settles 042417


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