Infinity Insights - Volume 12, Issue 25

AT-A-GLANCE SUMMARY

Extreme heat and drought spurred natural gas prices higher.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (August) support at 5.50 with resistance at 7.00 then 8.00.  Calendar year 2023 finds support at 4.60 with resistance at 5.80. Calendar year 2024 has support at 4.20 with resistance at 4.80.

Roadmap

NYMEX natural gas spot month (August) closed up by $0.982 at $7.016

Cal 2023
Calendar 2023 settled higher by ≈$0.325 at $5.1675

Cal 2024
Calendar 2024 ended up by ≈$0.135 at $4.6325

The “Widow Maker” 2023

Volatility…

OUR TAKE ON THE MARKETS 

NYMEX Natural Gas

Extreme heat and drought spurred natural gas prices higher. Spot month (August) is trading with $7 resistance and $5.50 support. The back of the curve has $4 support.

As this is hurricane season, we remind you of the “normal” timeline for market reaction:

·           With approaching storm, prices move higher due to concern for infrastructure damage

·           As the storm comes to land, temperatures cool

·           Facilities and transmission line outages take demand away, leaving weaker prices

Sometimes (not often) there is real damage (think “Rita” when Henry Hub was flooded and taken out of operation) and prices move higher. Overall, hurricanes result in a bearish outcome.

WHOLESALE POWER

ERCOT

Extreme demand has real time prices spiking, particularly when wind and/or solar assets underperform.

PJM

Prices continue to follow natural gas.