Infinity Insights - Volume 12, Issue 14

AT-A-GLANCE SUMMARY

Our take on higher prices across the curve is that this is the U.S. domestic natural gas market transitioning to THE global supply source.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (May) support 6.00 with resistance at 6.50.  Calendar year 2023 finds support at 4.40 with resistance at 5.00. Calendar year 2024 has support at 3.70 with resistance at 4.25.

For a look at our monthly market reports, visit Infinity Power Partner’s Market Overview.

Roadmap

NYMEX natural gas spot month (May) finished up by $0.558 at $6.278 compared to last Friday’s close.

Cal 2023
Calendar 2023 closed higher by ≈$0.4675 at $4.855.

Cal 2024
Calendar 2024 settled better by ≈$0.2675 at $4.07.

 The “Widow Maker” 2023

 Volatility…

OUR TAKE ON THE MARKETS

NYMEX Natural Gas

Our take on higher prices is that the U.S. domestic natural gas market is transitioning to THE global supply source. With current European LNG prices around $40, the current U.S. spot price at $6 is noticeably undervalued. What is the target price? We don’t know but price action tells us it’s higher than current levels. So what is a reasonable procurement strategy?

The lowest prices are found further out in the curve, currently around $4 for calendar strips from 2024 out. The front is where volatility and prices are highest. We believe waiting for pullbacks during this transition period is more wishful thinking than realistic expectations. Our recommendation is capture the back and suffer through the front.

WHOLESALE POWER

ERCOT

Power prices led by natural gas.

PJM

Power prices led by natural gas.