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Daily Market Update March 7, 2019

Early Morning Update

The Apr19 natural gas contract is trading down $0.01 at $2.83. The Apr19 crude oil contract is up $0.63 at $56.85.

 

Summary

Despite very cold conditions lingering over the Northeast this week, weather forecasts indicate a strong warmup as we head into the upcoming weekend. The National Weather Service is showing some reprieve from the cold on the horizon, with above-normal conditions forecasted in both the 6-10 and 8-14 day outlooks for the Northeast. Recent model refreshes seem to be less optimistic, with forecasts shifting cooler than first thought, driving end-of-season storage estimates lower and expanding the deficit. Based on weather outcomes for the last two weeks, storage level are projected to get as low as 1.04Tcf before switching to injections. This would result in the lowest post-winter gas storage level since the winter of 2014, requiring additional gas injections this summer to have a healthy amount of gas set aside for next winter. The market doesn’t seem to be concerned, as the Apr19 contract sold off 4.3 cents in trading on Wednesday to settle at $2.841. If storage levels continue to lag, prices may need to move higher to incent additional production. The market is expecting a withdrawal of 150 Bcf when the EIA releases their weekly storage report later this morning. Last year’s withdrawal for the corresponding week was just 60 Bcf.

 

Market Update 030719

Market Settles 030619

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