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Daily Market Update February 28, 2020

Early Morning Update

The Apr20 natural gas contract is trading down $0.04 at $1.71.  The Apr20 crude oil contract is down $1.68 at $45.41.

  

Summary

Everything was down yesterday!  NG, power, crude, stocks, my 401k….  The prompt month fell $0.085 to close the day at $1.752.  More warm weather forecasts and a bearish storage report led the decline.  The EIA reported a draw of 143 Bcf, compared to expectations of a 156 draw.  The lower draw, when coupled with above-average temps for nearly the entire country, gave the bulls little reason to push the market higher.  The coronavirus and corresponding effects to the national and global economies are also likely helping to push prices lower.  At the moment, there is little reason to hope for a return to a bullish price environment as all those factors are conspiring to keep prices low.  Looking ahead, the ongoing sub-$2.00 market is likely to keep producers from making significant investments in future production.  So if there’s a potential for a return to higher prices, it would have to come through slower production growth, or even production declines.  Stay tuned.

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