Daily Market Update May 1, 2020
Early Morning Update
The Jun20 natural gas contract is trading down $0.02 at $1.92. The Jun20 crude oil contract is up $1.28 at $20.12.
Summary
The June NYMEX contract closed at $1.949/MMBtu yesterday, gaining back the eight cents it lost the day earlier and hitting the two-month high for prompt month contracts. The EIA reported a 70 Bcf injection last week, roughly hitting the mark for the 74 Bcf 5-year average, but far less than the 114 Bcf injection we saw the same week last year. The 12-month strip and 2021 strip continued to gain strength this week, closing Thursday at $2.59 and $2.76 respectively. Associated gas production, which makes up ~38% of US NG Production, is at risk to lose 15 Bcf/d as oil shut-ins continue with oil prices remaining below $20/b. However, total US NG production continues to hover around 92 Bcf/d.
Weather forecasts are continuing with the warm west/cold east pattern. This is causing some lingering heating demand and slightly suppressing what would otherwise be very large storage injections.
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