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Daily Market Update May 12, 2022

Early Morning Update

The Jun ‘22 natural gas contract is trading down $0.33 at $7.31.  The Jun ‘22 crude oil contract is down $1.21 at $104.50.

Summary

Wash, rinse, and repeat seems to be a fitting slogan to describe the current state of the NYMEX natural gas market. Little improvement has been seen in the supply/demand fundamentals, which continue to drive intra-day market volatility. U.S. dry production came in flat yesterday at 93.8 Bcf/d, while total natural gas demand, including exports, increased by 0.8 Bcf/d. While the market has seen a huge surge in rig counts so far this year, we have yet to see a material increase in new gas coming online. Market consensus believes a realistic timeframe for this new gas to come to market could be Q3 '22, but with worker shortages on top of global supply chain issues, will this happen by Q3?In the U.S. Energy Information Administration's most recent Short Term Energy Outlook, they forecast natural gas inventories will end the injection season at almost 3.4 Tcf, 9% below the 5-year average, noting that summer temperatures will play a key role in where this final level materializes. Today's EIA storage report is expected to show a mild injection in the ballpark of 77 Bcf for the week ended May 6th. If actualized, this would be five Bcf lower than the 5-year average, but actually seven Bcf higher than last year's injection for this same week.

 

Market Update 05 12 2022

Market Settles 05 11 2022

 

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