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Daily Market Update March 30, 2020

Early Morning Update

The May20 natural gas contract is trading down $0.02 at $1.65.  The May20 crude oil contract is down $1.26 at $20.25.

Summary

On Friday, the April 2020 NYMEX natural gas futures contract expired, falling 0.3 cent and ultimately settling at $1.634/MMBtu. This is the lowest the prompt month has expired in about 25 years, with the last record set in July 1995. As we continue to see record-setting lows, it is hard to see an end right now to the bearish fundamentals in the market, which could remain weak, as Trump announced the extension of the nationwide quarantine due to COVID-19 through April 30th. We are starting to see the effects to demand, as non-essential businesses have closed and weather forecasts remain warmer-than-normal for this time of the year. Supply remains high, despite the low price environment, with U.S. dry production averaging just over 92.0 Bcf/d, down just slightly from the record highs set at the end of 2019. Storage inventories remain at a significant surplus to the five-year average, up about 17%, and almost 80% higher than where they were this time last year. This week, the U.S. Energy Information Administration is expected to report the last storage withdrawal of the winter season, and end-of-season estimates have reached just over 2.0 Tcf, very healthy levels as we head into summer.

Market Update033020

Market Settles 032720

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