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Daily Market Update May 17, 2021

Early Morning Update

The Jun ‘21 natural gas contract is trading up $0.09 at 3.05. The Jun ‘21 crude oil contract is down $0.42 at $64.95.

Summary

Last week’s NYMEX natural gas pricing activity was relatively quiet. The Jun ‘21 prompt month started the week off by losing 2.6 cents, and ultimately ended the week flat, gaining a mere $0.003/MMBtu, to settle at $2.961/MMBtu. Also last week, Q4-21 gained three cents and Q1-22 gained 2.7 cents. Weather forecasts are generally mild this week, then a bit of a warmup next week across the Midwest into the East Coast, while the balance of May appears overall mild. However, the supply/demand balance remains bullish, and near-term NYMEX futures are still elevated versus their trading history. The question remains: how will producers respond to the relatively strong prices on the near-term futures market? Will they remain fiscally disciplined or will current prices incentivize higher production numbers? Several large gas producers have recently put out presentations related to earnings calls, and their messages have been consistent: reduce capital expenditures. America’s largest gas producer, EQT, announced an additional $75 million cut to CAPEX since their last update in February, while Antero Resources, America’s third largest producer, announced a 20% decrease in spending versus 2020 levels.

 

Market Update 05 17 2021

Market Settles 05 14 2021

 

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