Daily Market Update June 28, 2018

Early Morning Update

The Aug18 natural gas contract is trading up $0.01 at $2.99.  The Aug18 crude contract is down $0.36 at $72.40.

Summary

In 18 of the last 20 months, the natural gas prompt month saw gains in its final day of trading. That trend continued yesterday, as the July ‘18 NYMEX contract rolled off the boards, but not before gaining 5.7 cents and settling just under the $3.00 technical ceiling at $2.996/MMBtu. Warmer-than-normal weather has kicked up power burn recently, and, as a result, the market is anticipating a weekly storage injection much smaller than has been seen over the past few weeks. Estimates for the growth in natural gas storage stockpiles in the week to June 22 range from 65 to 79 Bcf, with a consensus formed at 74 Bcf. A build at consensus, although 20 Bcf smaller than the past three-week average, would still be much larger than the 48 Bcf injection seen last year for the corresponding week, and right in line with the 73 Bcf five-year average. Total U.S. gas demand has been steadily increasing this week, with power burns up 1.0 Bcf/d from yesterday. Countering this, however, has been dry production, which reached an all-time high of 79.9 Bcf/d yesterday.

Market Update 062818