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Daily Market Update June 4, 2021

Early Morning Update

The Jul ‘21 natural gas contract is trading up $0.01 at $3.05. The Jul ‘21 crude oil contract is up $0.50 at $69.34.

Summary

The EIA storage report came out yesterday showing a 98Bcf injection for the week up till 5/28, coming in right on target to market consensus. As a result of the injection hitting target and managing to stay a meager 2Bcf above the 5-year average, the prompt month of Henry Hub natural gas settled close to the open with only a -$0.034/MMBtu change to land at $3.065/MMBtu. Last Friday saw an open around $2.963/MMBtu, a perfect $0.10/MMBtu below today's opening level. Most of the movement occurred around Tuesday when weather updates showed the northern half of North America experiencing much warmer than normal temperatures through the first few weeks of the Summer. As a result, power burn demand, which correlates heavily with air conditioning usage, is expected to increase by over 3Bcf/d on average throughout the next 7 days or so. This stress on natural gas supply continues to create higher prices especially for winter months. The January '22 contract is currently trading over the $3.30/MMBtu mark, with trading days over the last 3 weeks seeing prices as high as $3.44/MMBtu. Respite will likely only if Summer turns into moderate weather, natural gas production increases, and/or Winter weather predictions and real temperatures come in warmer than normal.

 

Market Update 06 04 2021

Market Settles 06 03 2021

 

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