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Daily Market Update May 9, 2018

Early Morning Update

The Jun18 natural gas contract is trading up $0.01 at $2.74. The Jun18 crude contract is up $1.64 at $70.70.

 

Summary

After trading in a range of $2.706 to $2.773, searching for direction, the June NG NYMEX contract settled at $2.732/MMBtu yesterday, 0.9 cents lower than Monday's settlement. U.S. natural gas demand has fallen precipitously since last month and dry gas production levels have averaged 78.2 Bcf/d so far in May, which should allow for recovery of the current 40% natural gas y-o-y storage  deficit. Near-term downside could be limited, as many summer outlooks call for early heat, and the National Weather Service’s 6-10 and 8-14 day outlooks were both revised yesterday, indicating a greater probability for warmer-than-normal temperatures to blanket nearly the entire United States. Many of the country’s large demand centers are expected to average in the high 70s/low 80s over the next few weeks, with Washington D.C. reaching 93 degrees on Saturday, a 15 degree departure from normal. We could see higher power burns, natural gas demand for electricity generation, as a result. Longer-term calendar strip prices were slightly lower yesterday, calendars 2012-2021 trading below $2.70/MMBtu. Calendars 2020-2022 set new all-time trading lows at $2.65, $2.67, and $2.72, respectively.

 

Market Update 050918 

Market Settles 050818

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