Happy Monday

What looked at first to be a boring day turnout out to be a big rally.

Today is expiry day for the NYMEX May contract and June is the front month.  May expired at $3.182 US/mm, up 24.5 cents.

The June contract was bouncing around a bit today: opened at $3.14us/mm overnight, started trading down at 7am, got to $3.054 before turning around and getting back up to $3.34 by 10am. Last trade $3.34, up 22 cents.

Looking at the big picture, we have sold off a lot over the past few weeks (many are calling it ‘oversold’) and it would be logical for the market to find some support here.  Although it really caught a bid and took off this morning, we should take some time to figure out what’s next. This might have just been some month end trading.

The weather forecast is for warmer weather and April is on track for an average production of 106.5 bcf/day (above the average production of 106.2bcf/day).  Furthermore, utilities are putting gas into storage so that we are now back to the 5 year average for this week, which is a good start towards filling storage by the end of injection season.  For the Thursday EIA storage report, I’m seeing some estimates as high as +100bcf (but it is still early in the week). 

The Canadian federal election is today and by this time tomorrow, we will know the results.