Daily Market Update June 14, 2021
Early Morning Update
The Jul ‘21 natural gas contract is trading up $0.01 at $3.30. The Jul ‘21 crude oil contract is up $0.59 at $71.50.
Summary
The NYMEX natural gas contract for June marched steadily higher last week. After closing at $3.097/MMBu on June 4, prices ticked up nearly every day last week, and the prompt month ended Friday’s trading session at $3.296/MMBtu. That’s the highest level for the prompt month since Oct ’20. The move higher isn’t limited to the natural gas market, as the entire energy complex has moved higher recently. Natural gas and crude markets suffer from inflationary pressures, as well as a lack of investment in new production. The power markets have been moving higher, mostly in lockstep with gas. In New England, prices are also moving up because of the stronger crude and LNG markets, and in California, the drought (lack of hydro generation) and high demand are fueling the bullishness. We’re also in peak demand season, with ERCOT, New England, and the IESO all calling peak demand alerts last week. With the cooler temps in the East this week, the chances of peak demands are lower, but we still have a long way to go in summer, and there will likely be plenty more alerts to come.
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