Infinity Insights - Volume 11, Issue 31

AT-A-GLANCE SUMMARY
Spot month NYMEX natural gas (currently October) has traded sideways for more than a month. 3.80 has proven to be very good support as well as resistance at 4.20. On Friday, prices broke out to the upside.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (October) support is 4.20 then 4.00 with resistance at 5.00. Calendar year 2022 finds support at 3.40 with resistance at 4.00. Calendar year 2023 has support at 3.00 with resistance at 3.20.

Roadmap
NYMEX natural gas spot month (October) closed higher by $0.522 at $4.388
compared to last Friday’s Close.

Calendar 2022
Calendar 2022 ended at $3.699, ≈$0.239 up.

Cal 2023
Calendar 2023 finished ≈$0.065 better at $3.0875.

OUR TAKE ON THE MARKET

NYMEX Natural Gas
Spot month NYMEX natural gas (currently October) has traded sideways for more than a month. 3.80 has proven to be very good support as well as resistance at 4.20. On Friday. Prices broke out to the upside. This occurring with the impending landfall of Hurricane Ida on the mid-Gulf Coast. These events are almost always bearish (businesses closed, power interrupted, cooler temperatures) with exceptions when infrastructure is damaged (“Katrina” and “Rita”). Knowing this, we recommended waiting out price action that may provide an opportunity for lower numbers. The likelihood of this is fading with the strength of the natural gas complex.

Past the impact of “Ida”, natural gas remains bullish. Open short positions (what you have until and unless you procure) are risky. Open interest has increased, indicating new longs are leading the way higher.

WHOLESALE POWER

ERCOT
Heat rates have traded slightly lower, most likely offsetting to some extent the strength of natural gas. Power prices remain firm.

PJM

Natural gas strength supports firm prices.