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Daily Market Update May 26, 2020

Early Morning Update

The Jun20 natural gas contract is trading up $0.07 at $1.80.  The Jul20 crude oil contract is up $1.15 at $34.40. 

Summary

On Friday, the June ’20 natural gas contract settled at $1.731, up two cents day-over-day. July ’20 crude settled at $33.25/bbl, down $0.67 from Thursday. The Permian lost another 10 rigs this past week, and with production cuts continuing, this is the lowest rig count we’ve seen since July 2016. U.S. natural gas demand fell 0.7 Bcf/d this weekend to 73.9 Bcf/d, with lower ResComm demand. We saw a massive dip, around 6.0 Bcf/d, in natural gas production over the past week, and those levels stayed consistent over the weekend and into today at 86.3 Bcf/d. The majority of the country experienced warmer-than-normal temperatures for Memorial Day Weekend, perhaps giving a taste to what this summer could hold. Forecasts point cooler for ERCOT and the Northeast with some storms creeping into the outlooks while the Midwest is forecasted to be warmer in comparison. Long-term natural gas pricing has seen little movement over the weekend since Cal ’21 pulled back last week. Cal’23 and ’24 are up slightly since Friday, but we are still in a backwardated market, with Cal’21 as the most expensive at $2.65 and Cal ’24 the least expensive at $2.42.

Market Update052620

Market Settles 052220

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