Daily Market Update June 11, 2020
Early Morning Update
The Jul20 natural gas contract is trading down $0.01 at $1.77. The Jul20 crude oil contract is down $2.80 at $36.80.
Summary
The July '20 natural gas contract closed out yesterday at $1.78, up less than two pennies from the prior day's close. The 12-month strip and Cal '21 both moved up two cents, as well. However, almost no movement was seen in Cal '22 and beyond. We've been in this very low price environment for so long, that it's hard to believe that at this time last year, we were seeing the prompt month around $2.36 and thought it couldn't get much lower than that. Due to the combination of reduced demand from COVID-19, relatively mild weather year-to-date, and strong natural gas storage reserves, we continue to see NYMEX hover at these historically low prices. Summer forecasts show slightly above-normal temperatures for the Northeast, West Coast, and Texas, which could increase demand. Combined with businesses re-opening from COVID-19, and we could potentially see some price reaction in the market, but that remains to be seen at this point. Looking ahead, the EIA will release their weekly storage report later this morning. Market participants are expecting to see an injection of around 94 Bcf to be reported, which is right in line with the 5-year average.
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