Daily Market Update July 2, 2020
Early Morning Update
The Aug20 natural gas contract is trading up $0.02 at $1.69. The Aug20 crude oil contract is up $0.43 at $40.25.
Summary
On the heels of slightly milder weather forecasts, the Aug'20 NYMEX natural gas prompt month dropped 8 cents yesterday. Near-term months September through November all encountered losses as well, losing just under a nickel on average. Forecasts are still showing above average temperatures, but those temperatures are slightly less elevated and not as widespread for the remainder of this week, primarily in the Midwest and Northeast. Forward calendar strips '21 and beyond did not see as much action, as they remained basically flat, only gaining about a penny each. With more and more folks working from home as a result of the pandemic, we've seen an increase in power burn demand due to the above average temperatures blanketing much of the Eastern U.S. This uptick in power burn demand has been enough to move the needle and create some price reaction at the front of the NYMEX curve. On the other hand, one of the fundamentals that has been helping to dampen price movement, is our very healthy natural gas storage inventory. Today the EIA will release their weekly storage report where market participants are expecting to see another injection higher than the 5 year average, somewhere around 80Bcf.
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