Infinity Insights - Volume 11, Issue 40

AT-A-GLANCE SUMMARY

Not much change for natural gas with the front prices jockeying between $5 and $6 and the back below new highs.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (December) support is 5.20 with resistance at 6.00. Calendar year 2022 finds support at 4.30 with resistance at 4.75. Calendar year 2023 has support at 3.40 with resistance at 3.75.

Roadmap
NYMEX natural gas spot month (December) closed $0.035 lower at $5.426 compared to last Friday’s Close

Calendar 2022
Calendar 2022 finished ≈$0.03 higher at $4.39.

Cal 2023
Calendar 2023 closed ≈$0.01 lower at $3.5575.

OUR TAKE ON THE MARKET

THE "WIDOW MAKER"

Volatility…

NYMEX Natural Gas

Not much change for natural gas with the front prices jockeying between $5 and $6 and the back below new highs. The back values provide lower numbers compared to the front but the gap is closing. Wishful thinking may see a break in the future but we don’t, save for overbought pullbacks as currently experiencing. This is a bull market until proven otherwise.

WHOLESALE POWER

ERCOT

Some interesting comments regarding retail energy pricing: The cost of ancillary services has changed since the February freeze debacle. The traditional approach was to lock the costs of the four services as REPs were comfortable with what were predictable risks. That’s apparently not the case anymore as recent PUCT proposals are causing innovations not fully defined. Reportedly some REPs are considering passing through these costs (at their cost?). It makes sense as no one yet has comfort with the procurement of the necessary services. Transparency suffers.
 
We are now canvassing REPs as to their practices in the hope of comparing apples to apples. Questions may not be answered, but they need to be asked. Resource adequacy comes with a price that today we can’t define.

PJM

Natural gas leads the way, most dramatically upfront.