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Daily Market Update April 22, 2021

Early Morning Update

The May ‘21 natural gas contract is trading down $0.02 at $2.67. The Jun ‘21 crude oil contract is up $0.15 at $61.50.

Summary

Natural gas futures contracts posted slight, yet widespread losses during yesterday’s trading session. After a mixed bag of gains and losses along the curve on Tuesday, the balance of 2021 strip weakened for the second day in a row, retreating to $2.88/MMBtu, down $0.025 day-over-day. A majority of the strip’s slide occurred with the May prompt contract, which fell by $0.035/MMBtu. The market is likely looking beyond the stalled cold front towards the bearish warmth expected to linger through mid-May. Further, production has begun to recover from dampened maintenance season levels amidst waning LNG demand. The May contract settled at $2.692/MMBtu, still within the middle of both its five-year and two-year trading ranges. Calendar strips ‘22 through ‘29 were each down nearly a penny as well. It’s worthy to note that the shape of the long term natural gas curve remains unchanged - calendar strips ‘22 through ‘24 are still backwardated, while the ‘25 through ‘29 calendar strips remain in a slight contango. After yesterday’s weakness, natural gas futures have the potential to turn bullish again after today’s storage report. The current range of injection estimates sits between 39 Bcf and 49 Bcf. While this range is much lower than last week’s 61 Bcf injection, it’s mostly aligned with the five-year-average injection level of 37 Bcf.

 

Market Update 04 22 2021

Market Settles 04 21 2021

 

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