Daily Market Update April 15, 2021
Early Morning Update
The May ‘21 natural gas contract is trading down $0.02 at $2.60. The May ‘21 crude oil contract is down $0.30 at $62.85.
Summary
It seems the forecast revision to cooler-than-normal temperatures has already been absorbed by near-term pricing as the May ‘21 NYMEX natural gas prompt month contract finished out yesterday's trading session flat on the day at $2.61. As it stands now, below-average temperatures are forecast for the central and eastern U.S. through the end of April, while the West shows a warming pattern during this time period. Depending on how these temperatures actualize, we may see a bump in gas demand for both late season heating in the East and early season cooling in the West. Direct Energy will be releasing a preliminary summer weather outlook today, which will give an initial glimpse into what the summer may hold. The summer weather outlook for areas with severe drought conditions like California are a hot topic as of late. A warmer-than-normal summer could be mean a higher propensity for wild fires and extreme heat, subsequently leading to a greater chance for price volatility. On the other hand, if this upcoming summer proves to be colder than normal in the West, perhaps the market will ease off the price premiums that have been holding very strong in CA due to the current climate conditions.
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