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Daily Market Update May 12, 2020

Early Morning Update

The Jun20 natural gas contract is trading down $0.03 at $1.79.  The Jun20 crude oil contract is up $1.21 at $25.35. 

Summary

Yesterday, June ‘20 natural gas settled at $1.826, relatively flat to Friday’s settle. June ‘20 crude also settle lower at $24.14, down $0.76 from yesterday morning. However, it’s already up about $1.40 since yesterday’s settle. The Middle East, especially Saudi Arabia, has announced additional production cuts through June, even more than the original OPEC agreement, which is most likely the cause of higher crude prices this morning. As for natural gas, we’ve seen a 0.5 Bcf/d increase in U.S. demand day-over-day to 70.3 Bcf/d. Res/Comm demand and power burn are down slightly due to lingering heating demand from cooler-than-normal temperatures across the Northeast. Natural gas production is down 1.3 Bcf/d day-over-day to 89.3 Bcf/d. Weather forecasts show cooler-than-normal temperatures across the northern border and into the Northeast dissipating over the next five days. However, warmer temperatures are on the horizon for the majority of the country in the 6-20 day outlook. There’s been little movement in the long-term natural gas strips, with Cal ’23 and Cal ’24 moving a little lower yesterday. We are still in a backwardated market, with Cal ’21 as the most expensive at $2.70, and Cal’24 the least expensive at $2.40.

Market Update051220

Market Settles 051120

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