Infinity Insights-Volume 10, Issue 21

AT-A-GLANCE SUMMARY

July NYMEX natural gas rolled into spot position with June’s expiration.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (July) has support at 1.60 with resistance at 185. 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 (July) settled weaker by $0.032at $1.849 compared to last Friday’s close.Calendar 2021Calendar 2021 finished unchanged at $2.Calendar 2022Calendar 2022 ended the week lower by ≤$ 0.01 at $2.485.

OUR TAKE ON THE MARKET

NYMEX Natural Gas

July NYMEX natural gas rolled into spot position with June’s expiration. Prices were defensive and perhaps an indication of a contagoed market moving towards the continuation chart’s support at 1.60. See 

https://www.infinitypowerpartners.com/insight/infinity-insights-volume-10-issue-19/

 .This pattern is limited to the balance of Calendar 2020. Beginning in 2021, a different picture is painted, one that is constructive with indicators supporting a move higher over time. The implication continues to be procurement locks are a good way to manage risk.

WHOLESALE POWER

ERCOT

LMP prices have historically outperformed forward curve pricing. We offer the results so far for 2020:

LMP Average from 1/1/2020

North

South

West

Houston

18.64

19.36

16.83

20.31

The problem is that when the spikes that will inevitably occur happen, it will be painful (note the wild Augusts of 2011 and 2019). The forecast for this summer is hot. Capacity is sufficient unless heat overwhelms projections.

Notice the summer price is softened by extending term.

PJM

Prices post-winter have retreated. Low numbers support procurement locks.

Stay Safe!