May 22 2024 Market Update

Fun to watch the news; All the stories about natural gas were bearish when I sat down this am: “Long Term Forecasts Cool” “LNG contractor files for bankruptcy” “Rising Production”

And then at 9am, the market goes on a tear. NYMEX June contract went from $2.61 US/mm to $2.836 by 2pm. The biggest one day move in quite a while. The theme here is to be skeptical of the “news”, especially when it just explains the most recent price move.

The simple fact is that we are in an uptrend this month. Starting at $1.913 US/mm on May first, the NYMEX June contract has been in a steady uptrend. The trend will continue until it breaks.

The safe explanation would be short covering ,and the CRTC Commitment of Traders would support this idea, but we are keeping an open mind. Maybe something has changed but as of today, storage is very full for this time of the year and these high prices will entice producers to turn the taps back on.

The rest of summer strip (July to Oct) is trading $3.05, which is the January high from 5 months ago. The winter 24-25 strip is trading $3.68, not quite at the January high of $3.785 but we are getting close. [WFG]

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