Infinity Insights - Volume 11, Issue 26

AT-A-GLANCE SUMMARY
It’s telling that the most bearish piece of NYMEX natural gas is that it’s overbought.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (September) support is 3.80 with resistance at 5.00. Calendar year 2022 finds support at 3.20 with resistance at 3.50. Calendar year 2023 has support at 2.80 with resistance at 3.00.

Roadmap

NYMEX natural gas spot month (September) finished at $4.042, $0.384 better compared to last Friday’s Close.

Calendar 2022
Calendar 2022 settled firmer at $3.415, ≈$0.1975 higher.

Cal 2023
Calendar 2023 finished ≈$0.0775 firmer at 8875.

OUR TAKE ON THE MARKET

NYMEX Natural Gas
It’s telling that the most bearish piece of NYMEX natural gas is that it’s overbought. The $4 level has been reached, an objective for many, yet it’s early in what promises to be a hot summer. Technically, the next major resistance is $5. Practically, it’s a tough call if you have procurement to do.

The front of the curve is the strongest as one would expect in a bull market. The movement of the calendar strips (what you buy when procuring) highlights the strength as the chart, below, shows.

We are not aware of any strategies that effectively improve price capture other than averaging down the front with extended term (the curve is backwardated). Short positions carry significant risk.

WHOLESALE POWER

ERCOT
Power price in Texas is at or near highs with both natural gas and heat rate strength. Concern for resource adequacy continues to encourage load following fixed pricing. LMP appears to be stabilizing but summer stress can pop up and ruin your day.

PJM

Natural gas strength continues to keep rates steady.