May 30 2024 Market Update

Happy Storage Day for the Bears

The EIA reported an injection of 84Bcf, more than the consensus of 77Bcf.  This is bearish because there is excess gas (supply – consumption) in the system than expected (the excess goes into storage).

Working gas in storage is far above the 5 year average, but injections have been smaller than the 5 year average.  Therefore, we a filling storage slower than the last five years, but that storage started the injection season much fuller than normal.  Regardless of which metric you use, we have a lot of gas in the ground and without something unexpected, storage ought to be close to full by the end of October.  The result ought to be increased volatility.

July NYMEX contract was trading about $2.68US/mm at 730am but traded down to $2.57 after the release.  Then it bounced back to $2.63 before trading down again to a new low.  Currently trading $2.564.

The rest of summer strip (July to October) was trading $2.64, down from the high last week of $3.17

The winter 24-25 strip is down 4 cents to $3.44.

Next Summer (25) is trading $3.274.  Winter 25-26 is trading $4.65.  Both are trading in the low end of the 2024 range so I would expect some consolidation here as the market digests the big moves in May.

On a side note, as I am writing this, there is a salsa line dancing class going on outside.  I am looking at these natural gas charts as the Cuban music blares outside.  Seems fitting. [WFG]

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