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Daily Market Update May 28, 2020

Early Morning Update

The Jul20 natural gas contract is trading down $0.01 at $1.88.  The Jul20 crude oil contract is down $0.21 at $32.60 

Summary

Weather forecasts continue to show very warm temperatures through the end of the month for most of the country. Most states are seeing temperature deviations as high as eight degrees above normal, making it feel very much like summer-time conditions. Despite the above-average temperatures, the June NYMEX prompt month contract expired at $1.722/MMBtu, down $0.07 day-over-day. Warmer-than-normal temperatures at this time of year are generally bullish to gas prices. However, it seems that the demand reduction due to COVID-19 has been dampening the effects on the market. Similar downward movement was felt at the front of the curve, with Q3 '20 losing a nickel, and Q4 '20 losing four cents. That movement fizzled out, though, as calendar strips '21 and beyond remained generally flat to losing/gaining less than two cents. This morning, the EIA will release their weekly storage report, where market participants are expecting to see a triple-digit injection of around 103 Bcf to be reported. If actualized, this would be 10 Bcf larger than the 5-year average benchmark and keep us on the trajectory to reach end-of-season storage levels of 3.9 Tcf.

Market Update052820

Market Settles 052720

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