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Daily Market Update April 14, 2020

Early Morning Update

The May20 natural gas contract is trading down $0.04 at $1.68.  The May20 crude oil contract is down $1.06 at $21.35. 

Summary

Yesterday, May 2020 settled at $1.724, down about a penny from the previous day’s settle. Crude oil also settled lower, at $22.41, just shy of a $1.00 lower on the day. Despite the U.S. working in conjunction with Saudi Arabia and Russia to settle on a lower oil production level, most crude market indicators are bearish, especially on the demand side. We saw a 5.6 Bcf/d increase day-over-day in U.S. natural gas demand to 81.2 Bcf/d. The demand increase is believed due to Res/Comm demand rallying 4.4 Bcf/d to 31.2 Bcf/d yesterday, as temperatures fell across the U.S. Heating demand is expected to increase as forecasts indicate we will continue to see cooler-than-normal temperatures across the North in the 20-day outlook, especially in the MidCon region for the next five days. Cooler temperatures seem to be the only reason demand is increasing, as more and more businesses and industries are closing due to COVID-19. Long-term natural gas strips are still backwardated, with Cal’21 as the most expensive calendar strip, rallying yesterday to $2.628, and Cal’23 as the least expensive, at $2.454. All in all, long term pricing continues to increase.

Market Update041420

Market Settles 041320

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