Daily Market Update April 8, 2021
Early Morning Update
The May ‘21 natural gas contract is trading down $0.03 at $2.49. The May ‘21 crude oil contract is down $0.37 at $59.40.
Summary
Natural gas contracts within the twelve-month strip strengthened during yesterday’s trading day, reversing their downward course from the prior three sessions. Most notably, the May and June contracts each gained over $0.06/MMBtu, settling at $2.52/MMBtu and $2.60/MMBtu, respectively. Current pricing levels are roughly halfway between the late-February $3.10/MMBtu high and the $2.15/MMBtu low from just over a year ago. It’s likely the market is reacting to the potential for higher short-term heating demand, as the two-week forecasts for load centers east of the Rockies have been revised colder. Lows in these regions are forecasted to shift downward about ten degrees from current lows and dip into the high 30s and low 40s. Both LNG and Mexican exports have continued to trend higher, as well, compounding the currently bullish demand fundamentals. Today’s storage report from the U.S. Energy Information Administration for the week ending April 2nd may work to slow some of the market’s gains, as estimates within the 10 Bcf through 26 Bcf range are above the 8 Bcf five-year average injection.
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