Infinity Insights-Volume 10, Issue 5

AT-A-GLANCE SUMMARYSpot month NYMEX natural gas (March) traded between $1.80 and $1.90 over the past week.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (March) has support at 1.80 then 1.60 with resistance at 1.90 then 1.97. The balance of the calendar year 2020 has support at 2.07 with resistance 2.14. The calendar year 2021 has support at 2.32 with resistance at 2.41.NYMEX natural gas spot month (March) closed up by $0.017 at $1.858.Balance of Calendar 2020 finished ≈$0.0075 higher at $2.09Calendar 2021 went out at $2.3525, better by ≈$0.01.

OUR TAKE ON THE MARKET

NYMEX Natural Gas

Spot month NYMEX natural gas (March) traded between $1.80 and $1.90 over the past week. The market is oversold, so some sort of sideways action is one way of counteracting the same. There’s a gap at $1.965 that continues as resistance. No appreciable weather adds to the trade looking beyond winter. Open interest is high, something that might become troublesome as the contract goes to expiration.Is this a pause or a bottoming action? Lots of issues on hand including decreased production of associated gas as crude demand drops due to coronavirus and no weather. Probably not much lower but is there reason to move much higher? While this plays out, deferred curve values offer opportunity.

WHOLESALE POWER

ERCOTNatural gas prices are at or near all-time lows while heat rates are at or near all-time highs. The opportunity to manage price risk is limited as one curve offsets the other. Real-time prices are averaging sub-$20 levels and continues to out-perform fixed prices.PJMLower natural gas prices remain associated with low power prices. No weather patterns appear on the horizon, suggesting more of the same.