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Jonathan Lee Senior Energy Market Intelligence Manager at ENGIE Impact
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Market Commentary | Week Ending 4/3

Natural gas mixed as a traders gauge supply and demand fundamentals.

Monday 3/30

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%.

Tuesday 3/31

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.

Wednesday 4/1

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.

Thursday 4/2

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.

Friday 4/3

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.

Looking Ahead

Commodity markets will remain depressed while slower economic activity continues to reduce demand.

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We’re partnering with E+E Leader to host a State of the Energy Market webinar. I look forward to speaking with two of my colleagues, Zach Davis and Brian Dooley, on April 8. Register today!

Thank you,

Jonathan Lee

Related Content: COVID-19 Resource Center