With the supply/demand balance showing signs of tightening as the economy starts to reopen from its virus-induced lockdown, natural gas futures were trading sharply higher early Monday. The June Nymex contract was up 10.2 cents to $1.748/MMBtu at around 8:45 a.m. ET.

Tighter balances appeared to be supporting the move higher early Monday, according to Bespoke Weather Services. The firm cited data showing production down to 84.4 Bcf/d, more than 11 Bcf off of highs from back in November.

“Power burns also appear to be picking up as well, thanks to the reopening of parts of the economy,” Bespoke said. “We would not rate them as strong, but definitely improved compared to where they have been recently.

“...This does not mean the risk is gone as far as completely filling storage,” but it “could be a first step in such a process. Granted, we still need to see more tightening in the data to achieve that goal.”

Analysts at EBW Analytics Group predicted range-bound trading for natural gas early this week, with “another push higher” possible after support held at $1.595.

“Prices could receive a further boost Tuesday afternoon, once analysts post estimates for this week’s storage report, which is likely to show a significant reduction in the storage surplus,” the EBW analysts said. “With near-term power sector natural gas demand near its low for the year, however, and the Memorial Day holiday weekend just around the corner, any gains made early in this week are likely to be erased before the week ends.”

As for the latest forecast outlook, Bespoke observed only minor changes compared to Friday’s expectations.

“We do see a fair amount of above normal coverage on the maps” from days six through 15 of the outlook period, “but at this time it is not focused in areas that generated enough” cooling demand to have much of an impact, Bespoke said.

Meanwhile, signs of hope have emerged in the crude market, with June WTI futures back above $30/bbl in early trading Monday.

Genscape Inc. analyst Josh Garcia pointed to production cuts from the Organization of the Petroleum Exporting Countries as one of the drivers of the strengthening in crude prices.

“Domestically, rig counts fell for the ninth week in a row, and last week Cushing inventory shrank for the first time since February,” Garcia said. “Combined with the small rebound in demand as Covid-19 lockdowns loosen, this price action reflects the signs of the market rebalancing.

“There is little risk of WTI prices going negative once the June contract expires on Tuesday, but prices could retreat once again if there is a resurgence in coronavirus cases as countries reopen.”

June crude oil futures were up $2.71 to $32.14/bbl at around 8:45 a.m. ET, while June RBOB gasoline was up 5.98 cents to $1.0300/gal.