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Daily Market Update May 31, 2022

Early Morning Update

The Jul ‘22 natural gas contract is trading down $0.22 at $8.51.  The Jul ‘22 crude oil contract is up $4.23 at $119.30.

Summary

Making its debut in the prompt month position on Friday, the July ‘22 natural gas contract fell almost 17 cents on the day, settling at 8.727/MMBtu. The 2023 calendar strip lost 2.7 cents, but everything beyond 2023 and out through 2034 gained two to three cents. Dry natural gas production had climbed as high as 95 Bcf/d on Friday, but fell 400 MMcf/d over the weekend, with losses seen in the Midcon and Northeast regions. After declining slightly on Saturday and Sunday, power burn ticked up to 31.2 Bcf/d today, an increase of 2.6 Bcf/d from Friday. Partially offsetting the increase in demand for natural gas to generate electricity, demand in the res/comm and industrial sectors fell slightly, but not enough to erase the overall increase in demand. LNG exports are also down 1.1 Bcf/d from Friday. Capacity for several pipelines in the Northeast will be reduced in June, including Algonquin, Tennessee, Iroquois, NEXUS, and Rover, as summer maintenance season begins. This could keep regional gas prices elevated, especially as natural gas continues to dominate the fuel stack in may regions. With natural gas prices having a heavy influence on power prices in most markets, this does not bode well for electric prices as we kick off what’s expected to be a warmer-than-normal summer.

 

Market Update 05 31 2022

Market Settles 05 27 2022

 

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