Daily Market Update May 17, 2019
Early Morning Update
The Jun19 natural gas contract is trading up $0.02 at $2.66. The Jun19 crude oil contract is up $0.38 at $63.25.
Summary
On the heels of warmer weather forecasts for the coming weeks, the prompt month natural gas contract showed strength in trading yesterday, gaining 3.8 cents to settle at $2.639/MMBtu. In fact, all of the summer months, June through September, rose by the same amount, 3.8 cents, except July, which rose four cents. The bullishness was only evident at the front of the NYMEX curve, with 2020 rising 2.3 cents, and all calendar strips after 2020 moving up or down less than a penny. The market seemed to shrug off the ninth straight better-than-normal storage report issued by the U.S. Energy Information Administration yesterday, that showed an addition of 106 Bcf into natural gas inventories in the week to May 10. This was two Bcf better than both the consensus of market estimates and the injection seen for the same week last year, and 17 Bcf greater than the 89 Bcf five-year average. The surplus to last year didn’t change much, currently 8.5%, while the deficit to the five-year average was cut to 14.7%. Storage levels are now projected to be 3,670 Bcf heading into next winter, less than a 2% deficit to the five-year average.
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