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Daily Market Update February 27, 2020

Early Morning Update

The Apr20 natural gas contract is trading down $0.07 at $1.77.  The Apr20 crude oil contract is down $1.78 at $46.95.

  

Summary

Today’s storage withdrawal is expected to settle somewhere between 161 and 158 Bcf for the week ending February 21st. Although this forecasted withdrawal is much larger than the five-year average level of 121 Bcf, natural gas pricing has moved very little, most likely because storage is still at very healthy levels. The March contract expired yesterday at $1.821/MMBtu. Before expiring, prompt month pricing moved seven cents throughout the day, peaking at $1.88, before closing down 2.6 cents. The average March settlement was $1.86, with a low of $1.76 on February 10th. For comparison, march 2019 settled at $2.85. The April contract is now the prompt month, which is currently trading at $1.78. April 2019 settled about $1 higher than current pricing levels at $2.713. It’s possible that prices could stay at these low levels for at least the next few weeks. The weather outlook for the Mid-Atlantic and Midwest regions is slightly below normal through March 1st, but temperatures swing towards much-above-normal within this region beginning March 2nd.

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