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Daily Market Update April 3, 2020

Early Morning Update

The May20 natural gas contract is trading down $0.01 at $1.54.  The May20 crude oil contract is up $2.64 at $27.96.

Summary

After a weak natural gas storage report of 19 Bcf withdrawal, the May 2020 NYMEX natural gas contract continued lower yesterday, losing 3.5 cents to settle at $1.552/MMBtu. The consensus of estimates had been a 27 Bcf withdrawal, and it’s believed that yesterday’s report will be the final draw of the season, marking inventories at 1.986 Tcf heading into injection season. Domestic natural gas demand destruction continued into the month of April and supply remains strong with dry natural gas productions steady at ~92 Bcf/d. With the stay home order through April, and near-term prices setting new all-time lows almost daily, perhaps the bottom has yet to be found. The May 2020 contract lost 14 cents in a week and at $1.552/MMBtu, is trading $1.014 lower than the May 2019 contract expiration. Crude made big news yesterday when President Trump ambiguously tweeted hopes that Saudi Arabia and Russia would be “…cutting back approximately 10 Million Barrels and maybe substantially more…” Oil prices spiked on the news. OPEC and allies are reportedly holding an emergency virtual meeting on Monday as a result.

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