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Daily Market Update March 23, 2020

Early Morning Update

The Apr20 natural gas contract is down $0.04 at $1.56.  The May20 crude oil contract is up $0.07 at $22.70.

 

Summary

The NYMEX selloff continued last week, largely due to uncertain global economic forecasts, as equity markets fell to levels not seen since the Trump inauguration three years ago. The DOW, S&P 500, and NASDAQ were down 17.3%, 14.9%, and 12.6%, respectively, and to put dollars around it – over 11 trillion dollars in U.S. market value has been lost. Similar losses can be seen in commodities, as the NYMEX gas prompt month settled Friday at $1.604, the lowest in over 27 years, and the 2022-2025 calendar strips all reached fresh all-time lows. Weather has trended warmer over the past week, where an early start to spring with above-normal temperatures is dominating the eastern half of the country. With NYMEX prices continuing to move lower and production becoming more uneconomic, the market expects that production will move lower to help balance the market, but that didn’t happen last week, with production still over 91 Bcf/d. Storage continues to be significantly above historical averages, with a withdraw of only 9 Bcf reported last week. End-of-winter storage estimates are estimated at 1.99 Tcf, 15% higher than the 5YA. Despite continued bearish fundamentals, the market volatility will likely continue until the economic impacts of COVID-19 are fully understood and a global economic rebound begins to emerge.

Market Update032320

Market Settles 032020

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