Daily Market Update April 5, 2019
Early Morning Update
The May19 natural gas contract is flat at $2.64. The May19 crude oil contract is down $0.08 at $62.02.
Summary
The NYMEX prompt slid a further 3.4c yesterday with the contract settling at $2.643. Fundamentals remain weak as NG production is strong, demand is much lower than this time last year and weather forecasts indicative little risk of extreme weather in the near-term. This time last year, much of the country was experiencing below-average temperatures, which caused draws from storage to continue well into April. This year, milder weather allowed injections to start 4 weeks earlier. This should allow the year-over-year storage deficit to close by the end of April. We’re likely to remain at a deficit to the 5-year average for weeks to come, however.
In addition to near-term weakness in the NYMEX, short-term power pricing has also been weak, with little volatility in the near-term. What could end this quiet period? Summer weather forecasts are due to be released in the next few weeks, potentially disrupting markets.
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