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Daily Market Update April 26, 2021

Early Morning Update

The May ‘21 natural gas contract is trading down $0.02 at $2.71. The Jun ‘21 crude oil contract is down $1.04 at $61.10.

Summary

As we wind down the month of April, the continued up and down weather pattern will remain in place over the coming days. With seasonably cold temperatures for the eastern 2/3 of the country last week, a brief summer-like pattern will hit mid-week, where record highs could be set in the mid-Atlantic. Even in the drought-stricken West, where 62% of the region is in severe drought according to the U.S. Drought Monitor, the first precipitation in over a month will fall, but, unfortunately, it isn’t the “pineapple express” needed to ease the drought as it will depart by Tuesday. In other news, NYMEX showed some interesting trends last week beyond Cal ‘24, where the price differentials between the longer calendar strips collapsed. On April 1st, the price range between Cals ‘24 and ‘30 was 25 cents (Cal ‘24 = 2.58 vs. Cal ‘30 = 2.83). On Friday’s close, the gap had shrunk 30% to 16 cents (Cal ‘24 = 2.57 vs. Cal ‘30 = 2.73). This price drop for Cal ‘30 exacerbates price backwardation over the next eight years across the NYMEX curve. As it stands, Cal ‘30 is the most expensive at 2.73, with Cal ‘22 right behind at 2.72, but now Cal ‘24 is the lowest at 2.57. This trend is worth following over the coming months as global renewable penetration grows and the U.S. economy continues its rebound from the COVID pandemic.

 

Market Update 04 26 2021

Market Settles 04 23 2021

 

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