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Daily Market Update March 27, 2020

Early Morning Update

The Apr20 natural gas contract is trading down $0.03 at $1.60.  The May20 crude oil contract is down $0.82 at $21.78. 

Summary

A relatively quiet day on the NYMEX as the prompt month fell to $1.637, down $.022 on the day.  In addition to the drop in near-term prices, longer-terms also fell as calendars 2023-2025 hit their all-time lows at 2.376, 2.404 and 2.432 respectively.    We’re also seeing some below average temperatures creep into the forecast for early to mid-April.

We’re also seeing some institutional traders reduce their short NYMEX NG positions as there is growing concern that the ongoing low prices and lack in investment will cause a whipsaw in prices when demand finally returns to normal.  The low demand has masked the slowdown in production growth but there will come a time when demand picks back up and we’ll need to incentivize further production to meet that demand growth.

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