Daily Market Update March 19, 2021
Early Morning Update
The Apr21 natural gas contract is flat at $2.48. The Apr21 crude oil contract is down $0.24 at $59.76.
Summary
Crude oil prices for the prompt month of April has come off by $4.60/Bbl and settled exactly at $60.00/Bbl. As long as prices remain above approximately $45/Bbl, producers will be incentivized to drill more domestic oil. While some market commentators are attempting to point at some fundamentals or consider what OPEC is doing internationally, a very simple answer is the fact that the market moved up quickly and this very well could be a technical correction. As oil prices move, we may see some changes in prices for natural gas as associated gas is created as byproducts increasing the national supply. As natural gas contracts move downwards -NYMEX prompt month has moved down $0.068/MMBtu settled at $2.60/MMBtu- further supply will push the bearish prices even further. Further bearish factors include the fact that warmer spring temperatures are letting storage take a bit of a breather after last month and the fact that natural gas suppliers have remained relatively steady.
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