Daily Market Update April 27, 2021
Early Morning Update
The May ‘21 natural gas contract is trading up $0.02 at $2.81. The Jun ‘21 crude oil contract is up $0.39 at $62.30.
Summary
The mixed movement of NYMEX natural gas prices continues as the nearer strips moved upwards, while calendar strips for 2023 and beyond moved down by about a penny. The prompt month gained six cent yesterday, settling at $2.79/MMBtu, while the 12-mo strip closed at $2.87, up 5.6 cents. The nearer strips are more concerned with weather patterns, storage levels, and short term supply/demand levels. All of which are still rather concerning, as temperatures moving to a warmer level can indicate potential for higher power burn, as natural gas-powered generators create energy for cooling demand. This is not unique to the U.S. either. Mexican natural gas exports hit nearly 7.0 Bcf/d, with over 4.1 Bcf/d being used for power generation. This ultimately does pull from domestic supplies, which could otherwise be put into U.S. storage. Storage levels themselves are expected to dip below the 5-year average once again this week, adding more stress over the upcoming winter and following year.
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