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Daily Market Update June 12, 2020

Early Morning Update

The Jul20 natural gas contract is trading down $0.02 at $1.79.  The Jul20 crude oil contract is up $0.36 at $36.70. 

Summary

Despite bearish fundamentals, the natural gas prompt month rose 3.3 cents yesterday, settling at $1.813/MMBtu. This comes on the heels of sliding U.S. demand, growing production, and a reported storage injection that exactly matched the consensus of market analysts’ expectations. After plateauing this week at 71.2 Bcf/d, national demand for natural gas has declined 4.7 Bcf/d over the past two days to 66.5 Bcf/d today. Most of the decline was due to a drop in power burns, which fell over 5.0 Bcf/d over the same period. U.S. dry production had been steady at about 86.1 Bcf/d all this week, but is expected to jump above 87 Bcf/d today. Meanwhile, the U.S. Energy Information Administration reported that natural gas storage stockpiles grew by 93 Bcf in the week to June 5, which was in line with the 94 Bcf five-year average storage build. Global demand for LNG is down due to the coronavirus pandemic, has fallen for the past seven weeks, and is now 40% lower than last month. Averaging 4.0 Bcf/d this past week, LNG exports are at their lowest level since September 2019. On the other hand, exports to Mexico reached an all-time high of 5.9 Bcf/d on Wednesday.

Market Update061220

Market Settles 061120

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