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Daily Market Update May 6, 2020

Early Morning Update

The Jun20 natural gas contract is trading down $0.08 at $2.05.  The Jun20 crude oil contract is down $1.46 at $23.10.

Summary

The NYMEX natural gas prompt month continued its rally from Monday, gaining another $0.141/MMBtu yesterday, opening the trading day at $1.993/MMBtu and closing at $2.134/MMBtu. This two-day streak has added $0.24/MMBtu to the June contract, and it’s the first time the prompt month has closed above $2 since January 17, 2020. Meanwhile, the calendar year strips for 2024 and 2025 reached all-time lows at $2.373/MMBtu and $2.382/MMBtu, respectively. As colder-than-normal temperatures take over much of the East Coast, as well as the mid-continent, heating related demand for natural gas has been moving steadily higher. Production has also slipped into the 89 Bcf/day territory over the week. Many market participants are expecting production to decline, but uncertain of the timing. Looking ahead, tomorrow’s storage report from the U.S. Energy Information Administration is expected to show an injection that is higher than the 5-year average, with early estimates in the neighborhood of 108 Bcf. The 5-year average is 74 Bcf.

Market Update050620

Market Settles 050520

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