Daily Market Update April 05, 2022
Early Morning Update
The May ‘22 natural gas contract is trading up $0.24 at $5.95. The May ‘22 crude oil contract is up $0.82 at $104.10.
Summary
As we progress through the week, weather forecasts are projected to moderate, causing demand to slide.Total demand over the next seven days is forecasted to average 93.4 Bcf/day, while the first five days of April have averaged 94.6 Bcf/day.As we shift gears and exit the heating season, market participants are looking forward to what to expect for this summer.While power burns year-to-date are averaging 1.0 Bcf/day higher than this time last year, higher prices for natural gas during the summer cooling season may have an impact on demand for the fuel.However, in periods of strong demand, resiliency is likely to trump price.This could be a recipe for volatility in the electric index market.Another fundamental to keep an eye on is LNG exports, which are averaging 12.6 Bcf/day so far in 2022, up 2.3 Bcf/day versus this time last year.It is likely that U.S. LNG exports should remain at or near full capacity this summer, even as new terminals enter commercial service and add incremental export capacity.This may be one reason why longer term NYMEX calendar strips have been surging lately.In the past four trading sessions, NYMEX calendars strips ‘23-’30 have all gained between 21 and 33 cents, and the lowest priced calendar strip is now sitting at $3.873/MMBtu for Cal ‘25.
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