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Daily Market Update March 26, 2020

Early Morning Update

The Apr20 natural gas contract is trading down $0.02 at $1.64.  The May20 crude oil contract is down $0.84 at $23.65.

 

Summary

The April contract gained less than a penny yesterday, up six cents from the 30-year low that was hit on Monday and settling at $1.659. Even with the historically low prices, production is still very strong and refuses to slow down. Surprisingly, production in the Permian is actually growing under the current circumstances, and even despite most of the gas production being tied to drilling for oil there. However, production is expected to wane over the next few weeks as oil prices are expected to remain low and temperatures are forecasted to climb slowly. The current range of estimates for the weekly storage report is between -21 and -36 Bcf. Last year’s withdrawal was a 39 Bcf, and the five-year average pull is 40 Bcf. Stockpiles could be decreased to around 2.01 Tcf, which wouldn’t put much of a dent in the year-over-year surplus of nearly 900 Bcf. Natural gas prices for the balance of the year have moved very little over the last month, still hovering around $2. Cals 21, 22, and 23 also moved about a penny throughout yesterday’s trading activity. Cal 21 has displayed the most movement over the last few weeks, up nearly 11 cents month-over-month after closing at $2.44 yesterday.

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Market Settles 032520

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