Market Update: May 31, 2023
The latest storage report presented by the EIA showed a 96 BCF injection which brings current inventory levels to 2.336 TCF. That level is approximately 17 percent higher than the 5-year average and more than 29 percent higher than one year ago.
Crude oil also dropped after the Memorial Day weekend as it settled below $70.00 on Tuesday. Traders appear to be concerned with soft manufacturing demand and a slow start to the summer driving season. All eyes will be on Thursday’s manufacturing report from the Institute for Supply Management (ISM) as the market waits to see if a run of six straight months of manufacturing contraction will be broken.
This weekend also saw a debt ceiling deal get reached in principle by President Biden and Speaker McCarthy. Both energy and financial markets have thus far remained unimpressed as fundamentals appear to be taking precedence.
According to the latest rig count data presented by Baker Hughes the total rig count dropped by nine last week bringing the total to 711 rigs. Oil rigs fell by five as gas rigs fell by four. One year ago, the total rig count sat at 727 rigs.
This week’s additional graphic from S&P Global Commodity Insights via Platts shows how Canadian natural gas production has rebounded since the wildfires in Alberta Canada broke out in early May. Cooler temperatures and steady precipitation are being credited with last week’s production climb.