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Daily Market Update March 24, 2020

Early Morning Update

The Apr20 natural gas contract is up $0.06 at $1.66.  The May20 crude oil contract is up $0.94 at $24.30.

 

Summary

Yesterday, the prompt month natural gas contract settled at $1.602/MMBtu, down just $0.002 from Friday, and continuing the record-low trend. The April natural gas contract expires this Friday, March 27th. Total U.S. demand dropped 4.6 Bcf/d day-over-day, which was primarily in the Res/Comm sector, driven by lower demand in the Northeast and Midwest due to a combination of warmer-than-normal weather and commercial businesses in the major demand markets reducing or closing operations temporarily due to COVID-19 restrictions. With above-normal temperatures predicted through the 20-day outlook, as well as the expectation of increased restrictions due to the coronavirus pandemic, demand is forecast to drop even further. On the industrial demand front, while it had been forecast to grow in 2020, it is now expected to shrink in response to the impact of coronavirus. We’re seeing some good news for LNG, where exports are starting to increase as Asian markets have begun to rebound. On the supply side, U.S. production remains strong at 92.5 Bcf/d, up about 0.5 Bcf/d over the past month.

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