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Daily Market Update May 18, 2021

Early Morning Update

The Jun ‘21 natural gas contract is trading down $0.04 at 3.07. The Jun ‘21 crude oil contract is up $0.23 at $66.50.

Summary

Both NYMEX natural gas and WTI crude oil prices increased by a significant margin yesterday, creating questions in the market as to why such changes occurred. The NYMEX Henry Hub natural gas prompt month settled approximately 15 cents higher at $3.109/MMBtu. To reach this level, prices had to break through the $3.00/MMBtu resistance level that had held fairly strong for prompt month pricing. While there was a two-day stint in February during the extreme winter event when prices settled above the $3 ceiling, prices for the prompt month have not been this high since the very beginning of November. Similar to stock trading, this previous ceiling could become a new strong support level. Fundamentals for production, storage, and demand did not change by a significant level during this price development, so what could have caused this? Some analysts are pointing to the speculative traders in the market, as they have maintained a net long position for natural gas pricing. Similarly, there was a net long position for crude oil, which broke its own ceiling at the $66.00/Bbl mark to settle at $66.27/Bbl after moving up $0.90 in yesterday’s trading session.

 

Market Update 05 18 2021

Market Settles 05 17 2021

 

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