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Daily Market Update June 7, 2019

Early Morning Update

The Jul19 natural gas contract is trading up $0.01 at $2.33.  The Jul19 crude oil contract is up $0.72 at $53.31.

Summary

Yesterday, the EIA reported another large injection, +119 Bcf - larger than most estimates.  The build was the 12th consecutive injection that was larger than the 5-year average and in that time, the deficit has shrunk from 33% to 11%.  In celebration of the large injection, the NYMEX prompt month contract traded lower by $.054 to close at $2.324.  The prompt month contract is now closer to zero than it is to the Dec ‘18 expiration price of $4.715.  It’s been an astounding bear run over the past 2 months driven primarily by mild temperatures for much of the major demand areas.  This has led to low demand for both gas and power, and that has been reflected in the low index prices.  For example, Transco Zone 6 NY GD index prices have averaged $2.496 since March 1 and PJM West Hub power prices have averaged $26.71 over the same time.  It’s hard for forward prices to be supportive when index prices have been that low.  While weather forecasts currently show milder temps, those can change - low prices won’t last forever.

Market Update 060719

Market Settles 060619

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