Daily Market Update June 5, 2020
Early Morning Update
The Jul20 natural gas contract is trading at $1.86, up $.04 from yesterday’s close. The Jul20 crude oil contract is up $1.61 at $39.00.
Summary
A quiet day for the energy complex yesterday as the NYMEX prompt month traded up a mere $.001 to close at $1.822. Crude and power markets were also quiet. The EIA reported a build into storage of 102 Bcf yesterday, below expectation but traders did not seem to be in a mood for a rally because pricing barely moved. Market fundamentals have been mixed which is providing little direction to the market. NG supply is down, heat is picking up and power burn demand is increasing. But exports are down and industrial demand is still low. The economy is restarting but it’s not clear if the pace will be linear and it’s unclear when/if exports will resume to their pre-pandemic levels.
On the weather side, we’re seeing some volatility along the east coast with cooler temps this week, then pockets of very high temps next week. Texas is forecasting very high temps next week with the potential for record demand levels for June. The potential for price spikes in Texas exists.
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