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Daily Market Update May 22, 2020

Early Morning Update

The Jun20 natural gas contract is trading flat to yesterday’s close at $1.71.  The Jul20 crude oil contract is down $1.17 at $32.75.

Summary

The NYMEX prompt month extended its decline yesterday, falling another six cents to settle at $1.71/MMBtu. Since its debut as the prompt month, the June natural gas contract has only lost eight cents, a fact hidden by the extreme volatility, which saw daily swings as much as 19 cents. The drop yesterday came on the heels of the U.S. Energy Information Administration’s weekly storage report, which showed natural gas stockpiles grew by 81 Bcf in the week to May 15. The total amount of gas in storage now stands at 2,503 Bcf, 779 Bcf (45%)more than this time last year, and 407 Bcf (19%) higher than the five-year average. Adding weight to the recent bearishness in the market is the lack of demand for natural gas. Industrial demand, in particular, has been hard-hit, with many plants shut down or operating under shortened work days, and many people working from home. Demand in that sector has averaged 20.2 Bcf/d so far this month, down almost 2.0 Bcf/d from last May. LNG exports have taken a blow, as well, averaging just under 7.0 Bcf/d so far this month, down from a record high of 9.6 Bcf/d in March. Direct Energy wishes everyone a healthy Memorial Day holiday!

Market Update052220

Market Settles 052120

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