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Daily Market Update May 31, 2017

Early Morning Update

The Jul17 natural gas contract is trading down $0.02 at $3.13.  The Jul17 crude contract is down $1.31 at $48.35.



On its first day of prompt month trading, the July 2017 NYMEX natural gas contract plummeted 9.1 cents, settling at $3.145/MMBtu yesterday. Weather, production, and managed money are in the driver’s seat, steering near-term natural gas price movements. Over the holiday weekend, weather vendors changed their tune for bullish June outlooks and released more moderate, cooler revisions for the eastern half of the country through the middle of June. Additionally, U.S. dry natural gas production hit year-to-date highs at 71.9 Bcf/d on Saturday and Sunday, 1.8 Bcf/d lower than the 73.7 Bcf/d all-time high. Managed money may have predicted this weeks’ downturn as the CFTC reported a decrease in net long positions last week. Turning attention to the long term, PJM posted the results of the base residual auction for the 2020/2021 capacity year last week. Two Exelon nuclear power plants failed to clear the auction and are at risk of early retirement, which could lead to additional natural gas demand for power generation in the future. Despite this news, longer-term contracts (calendar strips 2019-2023) are, on average, 13.7 cents off their lowest points.

Market Update 053117

Market Settles 053017

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