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Daily Market Update April 22, 2020

Early Morning Update

The May20 natural gas contract is trading down $0.04 at $1.78.  The Jun20 crude oil contract is up $0.23 at $11.80.

Summary

Yesterday, the NYMEX natural gas prompt month lost most of the gains it saw on Monday, losing an immodest $0.103/MMBtu, opening the trading day at $1.924/MMBtu and closing at $1.821/MMBtu. As crude oil prices across several benchmarks continue to suffer, the West Texas Intermediate (WTI) has natural gas traders concerned about the future of domestic oil production into next year. If oil production drops, so does associated natural gas production. However, production of natural gas remains relatively steady so far in April, averaging 92.3 Bcf/day, a Y-o-Y gain of 3.2 Bcf/day. Additionally, LNG spot prices at the Japan Korea Marker (JKM) fell below the NYMEX Henry Hub price for the first time ever yesterday, trading at a $0.12 discount to the Henry Hub for delivery in the second half of May. Traders are expecting more volatility as the market continues to grapple with the consequences of the coronavirus outbreak across the globe. Looking ahead, tomorrow’s storage report from the U.S. Energy Information Administration is expected to report an injection that is higher than the 5-year average.

Market Update042220

Market Settles 042120

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