Daily Market Update March 16, 2018

Early Morning Update

The Apr18 natural gas contract is trading flat to yesterday’s close at $2.68.  The Apr18 crude contract is up $0.19 at $61.38.

Summary

Another down day for the NYMEX as prompt month prices fell a nickel to close at $2.681.  The reported draw from storage was slightly lower than expectations and the market fell on the news.  Despite the draw being lower than expectations, it was still higher than historic averages and the lingering cold weather is the culprit.  What was once forecast to see mild temperatures, the 2nd half of March now looks to experience below-average temps, causing heating-related demand to linger a bit longer than expected.  This has caused end-winter storage estimates to slip to near 1.35 Tcf as demand stay relatively high. 
On the power side, the Texas market has stabilized and even fallen a bit after the sharp rise in late Feb/early March.  Concerns remain however about tight reserve margins for this coming summer.

Market Update 031618