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Daily Market Update April 28, 2022

Early Morning Update

The Jun ‘22 natural gas contract is trading down $0.16 at $7.18.  The Jun ‘22 crude oil contract is down $0.32 at $101.70.

Summary

On its last day of trading, the May '22 natural gas contract went out with a bang as it experienced significant intraday volatility and ultimately ended up gaining 6.1% on the day, settling above the $7 threshold at $7.27/MMBtu. Sizeable increases were seen through Feb '23 as each month in that strip gained $0.36 on average. Cal ’23 moved in a similar bullish direction, gaining $0.13 on the day, but the gains slowed there with Cal '24 increasing by a modest $0.03, and Cals '25-'27 actually losing between $0.01-$0.02 each. Natural gas production is likely the major culprit behind yesterday's rollercoaster ride. Dry production levels dipped to 91.4 Bcf/d, while demand continued to rise thanks to late season heating demand lingering in the Midcon and Northeast regions. Temperatures in those regions have been hovering 9-14 degrees below normal, which is enough to bump up heating demand in the midst of an already tight supply/demand balancing act. The lingering cold is likely also impacting inventory projections for today's EIA storage report. Market participants are expecting an injection in the ballpark of 41 Bcf to be reported today, which would trail both last week's build of 53 Bcf and the 5-year average injection of 53 Bcf.

 

Market Update 04 28 2022

Market Settles 04 27 2022

 

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