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Jonathan Lee Senior Energy Market Intelligence Manager at ENGIE Impact
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Market Commentary | Week Ending 6/26

Natural gas dives lower following larger-than-expected storage build.

Monday 6/22

The July-2020 NYMEX natural gas contract edged 0.5 cents lower to $1.664 per MMBtu after making a failed intraday attempt to push above strong upside technical resistance. The July-2020 WTI crude oil contract gained 71 cents to close and expire at $40.46 per barrel as an uptick in economic activity around the world suggested a coming increase in demand. Equity markets pushed higher, led by technology-related shares, as investors continued to weigh the potential of a quick economic recovery.

Tuesday 6/23

Natural gas declined 2.7 cents to $1.637 after weather models turned slightly cooler overnight, reducing the amount of cooling degree days forecast for the coming week. The new prompt August-2020 WTI crude contract gave up early session gains before eventually settling 36 cents lower at $40.37. Equities climbed higher after the day’s batch of economic data showed improvements in both the manufacturing sector and new home sales.

Wednesday 6/24

Natural gas slid 4.0 cents to $1.597 ahead of the following day’s storage report, which was expected to show a triple-digit build that would compare to last year’s 103 Bcf injection and the 5-year average 73 Bcf injection. Crude fell $2.36 to $38.01 on coronavirus concerns and after the EIA reported a 1.4-Million-barrel increase in domestic oil inventories. Stocks plummeted lower on economic concerns after the 7-day average of coronavirus cases increased by 30% over last week.

Thursday 6/25

Natural gas plunged 11.5 cents lower to $1.482 after the EIA reported a much larger-thanexpected 120 Bcf injection into storage, which put working gas in underground storage at 3,012 Bcf and widened the deficit to the 5-year average to 466 Bcf. Equity markets recovered some of the prior day’s losses as bank stocks rallied after the FDIC voted to ease some post-financial crisis requirements. Crude tracked higher with equities and closed 71 cents higher at $38.72.

Friday 6/26

The July-2020 NYMEX natural gas contract rebounded 1.3 cents to close and expire at $1.495 as traders covered short positions following Thursday’s big drop. Equities experienced steep losses as increasing coronavirus cases caused some states to re-close areas of their economies. Crude shed 23 cents to end the week at $38.49 as states rolling back some economic openings threatened to reverse the recent increase in demand.

Looking Ahead

Natural gas traders will closely follow supply and demand fundamentals to gauge future storage injections.

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