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Daily Market Update May 31, 2018

Early Morning Update

The Jul18 natural gas contract is trading up $0.05 at $2.94. The Jul18 crude contract is down $1.46 at $66.75.



In its debut as the prompt month, the July natural gas contract slipped 1.8 cents to settle at $2.885/MMBtu yesterday, as bearish fundamentals creep into the picture.  Weather outlooks have been cooling in the eastern U.S., the market is expecting its second triple-digit storage injection of the season, and U.S. dry production hit an all-time high of 78.9 Bcf/d on Tuesday.  Estimates for the weekly growth in storage inventories range from 97 to 105 Bcf, with a consensus at 100 Bcf.  A build at that level would be an improvement over last week’s 91 Bcf injection, and top the 80 Bcf build seen last year for the same week, as well as the 97 Bcf five-year average.  Normal and below-normal temperatures are forecast for key demand areas over the next two weeks, which should result in reduced demand from the power generation sector, and with production at record levels, it is likely that storage building will continue at a healthy pace going forward.  Rig counts continue to rise, with Baker Hughes reporting an increase of 13 gas and oil rigs to a total of 1,059 in the week to May 25, indicating an uptick in production, as well.



Market Update 053118

Market Settles 053018

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