Infinity Insights - Volume 11, Issue 21

AT-A-GLANCE SUMMARY
NYMEX spot-month natural gas (July) found resistance as it neared $3.40.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot-month natural gas (July) support is 3.00 with resistance at 3.40. Calendar year 2022 finds support at 2.80 with resistance at 3.00. Calendar year 2023 has support at 2.70 with resistance at 2.95.

Roadmap
NYMEX natural gas spot month (July) finished at $3.215, $0.081 lower

Calendar 2022
Calendar 2022 ended higher by ≈$0.0075 at $2.955

Cal 2023
Calendar 2023 finished up ≈$0.0075 at $2.7125

OUR TAKE ON THE MARKET

NYMEX Natural Gas

NYMEX spot-month natural gas (July) found resistance as it neared $3.40. Pulling back has been aided by forecasts of relatively cooler temperatures and the tropical weather system’s potential. While sideways action is in the cards, $3.00 appears as solid support. The back of the curve has been steady while the front trades defensively. Any pullbacks are expected to be short-lived and, if presented, a buying opportunity.

WHOLESALE POWER

It has been years since we’ve experienced a bull market and many may be stymied by its strength. Those with exposure to market volatility have no good choice as the attractive prices are gone, likely not to return in the current market. Biting the bullet is preferable to unexpected price spikes.

Additionally, attempting to structure procurement by leaving open either the feedstock piece (natural gas) or the capacity piece (heat rates) has, in our view, little appeal. Both are near the highs and being open to either is risky as you would be picking a top, something to be avoided.

ERCOT
Coincidental to extreme heat and generation fails, power markets surged higher early in the week as participants sought capacity (heat rates) and sellers were scarce. Even with a pullback from highs, power marks remain strong.

PJM

PJM pricing continues to follow the strength of natural gas.