Daily Market Update June 24, 2022
Early Morning Update
The Jul ‘22 natural gas contract is trading up $0.07 at $6.31. The Aug ‘22 crude oil contract is up $2.17 at $106.44.
Summary
In what started as a quiet day, the market ended up threatening to trade with a $5-handle. The EIA reported a much-larger-than-expected 74 Bcf injection. Estimates were in the mid-50’s so this larger injection implied a looser supply/demand balance, at least for last week. The effect was that the market dropped immediately and eventually settled down $0.619 at $6.239. This was the lowest settle price since 4/6/22. Months further out the curve fell as well, but not nearly as much as near-term months. Cal ‘23 fell $0.15 and Cal ‘24 fell $0.04. The report was a surprise and made the market wonder what the real impact of Freeport will be. On the power side, volatility continued, especially in the mid-con as high temps continues to drive very high demand, leading to high prices, especially in MISO and ERCOT. Record high demand is being set in those regions, testing reserve margins.
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