Daily Market Update March 31, 2022
Early Morning Update
The May ‘22 natural gas contract is trading down $0.04 at $5.57. The May ‘22 crude oil contract is down $5.92 at $101.90.
Summary
The May '22 prompt month contract has started out with a bang, increasing 27 cents day-over-day to settle at $5.605/MMBtu. The strength was not only centered at the front of the curve, with the 12-month strip gaining 24 cents and the longer term calendar strips beginning with 2025 all gaining between $0.08 and $0.11 each. Weather forecasts are calling for a transient cool shot in the Midcon over the course of the next several days, and temperatures along the East Coast to be mostly normal. Looking ahead over the next 6-20 days, near-term weather forecasts predict seasonal temperatures for most of the country, with warmer conditions favoring California and the Southwest into Texas into the middle of April. Overall supply concerns are still ringing true in the market as production has averaged 93.8 Bcf/d for the month of March, trailing levels near 97 Bcf/d that were seen at the end of 2021. Market participants are expecting the EIA to report the first injection of the year today, somewhere in the ballpark of 27 Bcf for the week ended March 25. Due to the late-winter cold across the East, the chance for one more storage withdrawal next week is likely to be reported. If today's injection actualizes as expected, this would bring natural gas storage inventories up to 1,416 Bcf.
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