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Daily Market Update May 2, 2018

Early Morning Update

The Jun18 natural gas contract is trading down $0.03 at $2.77. The Jun18 crude contract is down $0.15 at $67.10.

 

Summary

Yesterday, the NYMEX NG prompt month contract gained 3.9 cents to settle at $2.802/MMBtu, hitting the $2.80 prompt month resistance level that has been strong since the beginning of March. Day-over-day, U.S. dry natural gas production dropped ~1 Bcf/d to 77.7 Bcf/d yesterday, but demand also fell by more than 5 Bcf/d.  The National Weather Service made warmer revisions to their 6-10 and 8-14 day outlooks yesterday. After April 2018 checked in as the 5th coldest April on record back to 1950, nationally, the market could be looking for early heat as a bullish indicator to move prices higher. First Energy Solutions recently notified PJM of plans to retire its Davis-Besse, Perry, and Beaver Valley nuclear plants over the next two to three years due to economics. In response, PJM completed a reliability study and found that the plants, totaling ~4,000 MW, are not required for reliability. Despite the potential for early retirements for many coal and nuclear generators across the US, 2019-2024 calendar strips are still trading between $2.71 and $2.92, with cals 2020-2022 only 1-2 cents off all-time trading lows. 

 

Market Update 050218 

Market Settles 050118

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