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Daily Market Update May 13, 2020

Early Morning Update

The Jun20 natural gas contract is trading up $0.01 at $1.73.  The Jun20 crude oil contract is up $0.12 at $25.90. 

Summary

Yesterday’s trading session saw NYMEX natural gas move down through the near-term, with the June prompt month contract closing at $1.72/MMBtu, which was a loss of 10.6 cents on the day. The balance of 2020 moved down nine cents to just under $2.20, and the 12-month strip dropped three cents to close at $2.43. All forward calendar strips showed little movement, with 2021 moving the most with a three cent pullback to close at $2.67, 2022 lost just under a penny to $2.49, and 2023 lost just a half cent to $2.41. The further out years all had slight upward movement. There is still backwardation in the market, but the calendar strips of 2023 through 2026 are all trading within just one cent of each other. Yesterday’s downward movement in the near term comes as production ticked down to 88.8 Bcf/d, but warmer-than-average temperatures in the forecast suggest that Res/Comm demand will drop significantly over the next few weeks. Even with this pullback in production to below where we were last year at this time, the next three storage reports are projected to show a net increase of 53 Bcf over the 5-year average as demand softens.

Market Update051320

Market Settles 051220

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