Daily Market Update March 18, 2022
Early Morning Update
The Apr ‘22 natural gas contract is trading down $0.11 at $4.88. The Apr ‘22 crude oil contract is up $0.23 at $103.21.
Summary
The prompt month contract rallied $0.24 yesterday to close at $4.99, at the high end of the range that we’ve been in since mid-February. The front month has been in $4.50 to $5.00 range over the past month, but yesterdays’ bullish EIA report pushed the market to the top of that range, threatening to break out of it. The EIA did report a much larger-than-expected draw from storage of 79 Bcf. Expectations heading into the report were calling for a draw in the low to mid-60’s, so this was somewhat of a surprise, and the market rallied on the news. On the weather front, we’re starting to see some cold temps creep back into the forecast, as the very warm conditions on the east coast appear set to give way to cooler-than-average temps starting next week. And while average temps are getting warmer, cooler forecasts will still cause some additional heating demand, potentially delaying the start of injection season, or causing lower injections in April. But for now, the milder conditions are causing lower index prices, which are a welcome relief after such an extended period of high prices this winter.
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