Natural gas mixed as a traders gauge supply and demand fundamentals.
The new prompt May-2020 NYMEX natural gas contract gained 1.9 cents to close at $1.690 per MMBtu with support from stronger coal-to-gas switching, which was estimated to be around 1.2 Bcf per day above the 5-year average. Crude oil carved out fresh lows after financial institutions forecast global oil demand to plummet by 12 million barrels a day during the second quarter. The May-2020 WTI contract closed $1.42 lower at $20.09 per barrel. Equity markets bounced higher even after some government officials indicated second quarter GDP could contract by as much as 25%.
Natural gas fell 5.0 cents lower to $1.640 as the weather forecast called for above-normal temperatures to cover much of the nation into mid-April. Crude rebounded 39 cents to $20.48 after an official gauge of China’s manufacturing sector showed a solid uptick in activity. Meanwhile, stocks lost ground on the last day of the quarter as coronavirus worries outweighed the better-than expected Chinese data.
Natural gas lost another 5.3 cents to settle at $1.587 ahead of the next day’s storage report, which was expected to show another draw in the mid-20s. Oil prices edged 17 cents lower to $20.31 after the EIA reported a massive 13.8-Million-barrel increase in domestic oil inventories. Stocks retreated as investors remained on edge after the White House released new projections of the death toll from the coronavirus pandemic.
Natural gas closed 3.5 cents lower at $1.552 after the EIA reported a 19 Bcf withdrawal from storage, which was slightly lower than expectations and kept the surplus to the 5-year average steady at 292 Bcf. Crude soared $5.01 to $25.32 after President Trump said Saudi Arabia and Russia may be nearing a truce to the oil price war and could slash output by millions of barrels a day. Equity markets climbed higher with support from higher energy shares even as jobless claims doubled from the prior week.
The cost of gas rebounded 6.9 cents to end the week at $1.621 on a round of short covering even as demand from the commercial and industrial sector continued to dwindle. Crude traders added another $3.02 to wrap up the session at $28.34 after Russia and Saudi Arabia pressed the U.S. to join in coordinated output cuts to help stabilize prices. Equities traded in the red after the Labor Department reported deeperthan- expected job losses due to the economic fallout from the coronavirus.
Commodity markets will remain depressed while slower economic activity continues to reduce demand.
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