Daily Market Update May 23, 2017
Early Morning Update
The Jun17 natural gas contract is trading down $0.03 at $3.30. The Jul17 crude contract is down $0.08 at $51.05.
Summary
A glimmer of possible augmented demand over the next two weeks sparked gains in the natural gas prompt month, raising June 2017 prices over seven cents to $3.33/MMBtu. Over the past two sessions, the prompt month has gained over 4%, and is approaching its highest levels since January. A mix of below- and above-average temperatures is driving demand forecasts, indicating some late season heating and early season cooling load. The eastern and southern U.S. is expected to show warmer-than-average temperatures over the 6-to-14 days forecasts, while cooler temperatures dominate the central U.S. Looking ahead to June, natural gas storage levels may be of increasing concern if the current warmer-than-average outlook holds true. The next three weeks are forecasted to come in lower than historical values, narrowing the surplus to five-year average inventory levels. Natural gas storage availability is not being helped by virtually immobile production numbers, despite rising rig counts and more attractive prices.