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Daily Market Update May 23, 2018

Early Morning Update

The Jun18 natural gas contract is trading up $0.01 at $2.92. The Jul18 crude contract is down $0.30 at $71.90.

 

Summary

Amid bullish weather forecasts indicating an early start to summer, NYMEX natural gas prices increased across the board yesterday. The National Weather Service’s 6-10 and 8-14 day outlooks published yesterday favor a stronger probability for warmer-than-average temperatures blanketing the United States, with the exception of the Southeast. Further, the CFTC reported the Managed Money sector increased their net-long positions recently to ~155,000 contracts. The June 2018 NYMEX NG prompt month soared to settlement at $2.908/MMBtu, a gain of 9.8 cents versus Monday’s settlement (the largest one-day gain for prompt month since 1/29/18, when the February contract expired). After hitting a recent low point at 76.8 Bcf/d on May 16, U.S. dry production levels have been making a comeback, which could mean pipeline maintenance season is drawing to a close. Additional pipeline capacity should allow for continued production growth throughout summer, and the potential to ease the current storage deficit, which currently sits at 35% to last year and 25% to the 5-year average. Longer-term NG prices also settled higher yesterday. Calendar strips 2019-2024 are now all above $2.70/MMBtu at $2.79, $2.72, $2.71, $2.74, $2.81, and $2.87 respectively.

 

Market Update 052318 

Market Settles 052218

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