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Daily Market Update March 12, 2020

Early Morning Update

The Apr20 natural gas contract is trading down $0.09 at $1.79.  The Apr20 crude oil contract is down $2.18 at $30.80.

 

Summary

After climbing nearly 16 cents on Tuesday amid short-covering, the April natural gas contract lost close to six cents throughout yesterday’s trading activity and closed at $1.878/MMBtu. So far in March, the front month settle is averaging $1.80MMBtu. This price level is nearly $1/MMBtu lower than the April settlements from 2017-2019, and still ten cents lower than the 2016 settlement, which has held the low pricing benchmark for the last few years. Although production is still about 4.0 Bcf/d higher year-over-year at 91 Bcf/d, we may see production begin to tail off slightly as global demand for both oil and gas is reduced. Further, storage levels remain healthy exiting a very mild winter. We’re expecting a withdrawal of only 56 Bcf this morning, which is well below average versus both last year at 164 Bcf and the five-year average at 99 Bcf. Should this actualize, storage levels are forecasted to be about 60% higher year-over-year. Overall, the currently low-priced environment isn’t expected to change anytime soon. Low demand, strong supply, and mild weather on the horizon continue to rule current market fundamentals. 

Market Update031220

Market Settles 031120

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