Daily Market Update April 28, 2021
Early Morning Update
The May ‘21 natural gas contract is trading up $0.03 at $2.90. The Jun ‘21 crude oil contract is up $0.46 at $63.40.
Summary
The bulls continue to dominate the market, providing upward pressure to not only this upcoming summer pricing, but longer term pricing, as well. Month to date, total supply is lower by about 0.2 Bcf/d, and demand is up around 3.0 Bcf/d, mostly due to the increases in industrial demand and natural gas exports. Weather forecasts continue to have a significant impact on pricing, with a focus on summer weather outlooks. Short-term forecasts have flipped from last week’s cooler temps to more normal and slightly warmer-than-normal temps through the middle of next month. If this trend continues, the warmer forecasts could mean early cooling demand to start the summer, putting even more pressure on the supply/demand balance. U.S. dry production has ticked up slightly so far this month, up just over 91.0 Bcf/d, and, hopefully, will continue this upward trend to meet the expected demand growth as we head into summer. Current storage levels are flirting with the five-year average at 1,883 Bcf and could, once again, dip to a deficit after tomorrow’s EIA storage report. Following the cold weather last week, the estimates for tomorrow’s report show an injection of just 8 Bcf, much lower than the five-year average of 67 Bcf. NYMEX natural gas futures price for May surged up 8.3 cents yesterday to settle at $2.873/MMBtu as it approached it’s final day of trading today.
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