Infinity Insights-Volume 10, Issue 20

AT-A-GLANCE SUMMARY

Price action for spot month NYMEX natural gas (June) remains in a trading range.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (June) has support at 1.60 with resistance at 1.85. Calendar year 2021 finds support at 2.60 then 2.50 with resistance at 2.75. Calendar year 2022 has support at 2.40 with resistance at 2.55.RoadmapNYMEX natural gas spot month (June) finished up by $0.085 at $1.731 compared to last Friday’s close.Calendar 2021Calendar 2021 closed ≤$0.01 off at $2.6535.Calendar 2022Calendar 2022 settled unchanged at $2.49.

OUR TAKE ON THE MARKET

NYMEX Natural Gas

Price action for spot month NYMEX natural gas (June) remains in a trading range. The back of the curve likewise remains range-bound, Calendar year 2021 trading between 2.60 and 2.75. Open interest is steady. What we glean from this is a market marking time for the next move.Not so long ago, conventional wisdom was that volatility and high prices were a thing of the past. There was huge reserve of gas with fracturing, lots of supply to meet demand, inferring that chances of flat price at low levels likely. That said, technically, price action paints an interesting picture as it is consolidating. Risk appears to the upside. Locking some part of predictable demand is worth considering.

WHOLESALE POWER

ERCOT

Key to expectations is heat. Adequate reserves initially reported sufficient are now questioned. An example is preparation for incremental generation from coal. Renewables are growing and, with the advent of economic storage, will deeply impact those unexpected price spikes such as witnessed last summer. We’re not there yet and LMP is the answer of last resort. Risk is higher.

PJM

March saw lowest prices for PJM. Since then, the market has firmed, following natural gas as discussed above. Risk is higher.