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Daily Market Update May 8, 2020

Early Morning Update

The Jun20 natural gas contract is trading down $0.05 at $1.84.  The Jun20 crude oil contract is up $0.63 at $24.18.

Summary

The prompt NG contract continued its move down from the recent high set on Tuesday, closing yesterday at $1.894, down $.05 on the day.  After breaching $2.00 on Tuesday, the market has been unable to sustain the bull run.  The EIA yesterday reported a build into storage of 109 Bcf, in-line with estimates.  Storage levels are sharply higher than this time last year and also 25% above the 5-year average. 

Index markets remain very weak with low demand for both gas and power across much of the country, especially the east coast.  Forecasts for the next week continue to show cooler than average temps along the east coast but a warm-up looks to be on the way.  A warm-up, along with a tentative opening of the economy could cause demand to start to creep higher.  Demand levels for power and NG are very low right now, which has crushed index pricing.  Increases in temperature and economic activity would be a welcome sign for the sluggish index markets

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