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Daily Market Update April 13, 2020

Early Morning Update

The May20 natural gas contract is trading up $0.05 at $1.78.  The May20 crude oil contract is up $0.74 at $23.50.

 

Summary

On Thursday, the May 2020 NYMEX natural gas futures price barely budged, moving down half a cent to settle at $1.733/MMBtu. The EIA reported the first injection of the season, a 38 Bcf build into storage inventories. This was much larger than the 6 Bcf five-year average benchmark, and was also higher than the 25 Bcf injection seen last year for the same week. With storage already at healthy levels going into this summer, the bears continue to dominate for now, even with some colder temps that have begun to roll in this week through the 6-10 day outlook. OPEC has outlined a deal to cut oil production by 10 MMBls/d. However, there are still concerns that this cut may not be enough to alleviate the current supply gut. We continue to see the effects of COVID-19 to demand depletion, with some industrial customers starting to come off line due to distancing guidelines and employees being infected with the virus. This morning, it was reported that one of the largest protein processors had to close for a few days. Supply remains high for now, despite the current low price environments for both gas and crude, with U.S. dry production remaining just over 92.0 Bcf/d, about 3.0 Bcf/d over where we were this time in 2019.

Market Update041320

Market Settles 040920

 

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