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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