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Daily Market Update June 7, 2021

Early Morning Update

The Jul ‘21 natural gas contract is trading down $0.03 at $3.06.  The Jul ‘21 crude oil contract is down $0.22 at $69.40.

Summary

As a new week begins, there are a number of things worth watching in the energy complex this week. First off is the continued heat wave for the Mid-Atlantic and Northeast that started on Saturday and will continue into mid-week. Daily temperature records were broken in many locations where temps hit the mid-90s, and, with the increased demand, day-ahead on-peak prices are trading in the mid to upper 40s for today in PJM and NY/NE, representing the highest prices in four months. With warmer weather in place, other market fundamentals continue to be tight with production around 90 Bcf/d and storage continuing to trend behind last year and the 5-year average. This combination may be an indicator of some interesting trends in NYMEX forward pricing that we haven’t seen in 2021. The recent price increases have largely been confined to the short term forwards (next 18 months), but, last week, the market started to show increasing forward prices into 2023 and beyond. Week-over-week prices for Cals ‘23 and ‘24 were each up eight cents to 2.72 and $2.70, respectively, Cal ‘25 was up seven cents to 2.69, and Cal ‘26 was up four cents to 2.67. These terms had been trading flat for the previous month around $2.60, so these large moves warrant tracking if the trend continues higher or returns to its previous range.

Market Update060721

Market Settles 060421

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