Infinity Insights - Volume 10, Issue 44

AT-A-GLANCE SUMMARY
Spot NYMEX natural gas (January as of Wednesday the 25th) has dropped ≈$1/MMBTU since the end of October.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (January) support is 2.45 with resistance at 2.85 than 3.15. Calendar year 2021 finds support at 2.55 with resistance at 2.85. Calendar year 2022 has support at 2.60 with resistance at 2.85.

Roadmap

NYMEX natural gas spot month (January) ended the week lower by $0.345 at $2.65 versus last Friday close.

Calendar 2021
Calendar 2021 fell ≈$0.25, closing at $2.7375.

Calendar 2022
Calendar 2022 ended at $2.6725, ≤$0.0925 lower than last Friday.

OUR TAKE ON THE MARKET

NYMEX Natural Gas

Spot NYMEX natural gas (January as of Wednesday) has dropped ≈$1/MMBTU since the end of October. The weakness was coincidental with the presidential election and surprised many of the market participants (including us). There was a double top that held, signaling the reversal. Calendar strips likewise tanked, confirming the bearish turn.

As our client base of energy procurers are short until they lock prices, lower is better. How low might prices go? Bottom picking is a guessing game but last vestige of support is around 2.40ish as chart, below, depicts:

The more important values (Calendar strips) have witnessed the largest fall in Cal 2021, which is as expected. Support there is 2.60ish, then 2.30ish. Those strips from 2023 and beyond continue to hold more or less values around 2.50. Cal 2022 had been holding 2.75 but faltered with spot NYMEX. Numbers offer intrinsic value and deserve serious attention.

WHOLESALE POWER

ERCOT

As before, power marks follow natural gas and are defensive.

PJM

As before, power marks follow natural gas and are defensive.

Stay Safe!