Infinity Insights - Volume 12, Issue 44
AT-A-GLANCE SUMMARY
The weight of 80-degree temperatures and uncertainty of when Freeport LNG facility will return to operation pushed the front of the natural gas curve to new lows.
SUMMARY OF THE LAST WEEK IN CHARTS
Spot month natural gas (January) support at 5.00 with resistance at 6.60. Calendar year 2023 finds support at 4.90 with resistance at 5.90. Calendar year 2024 has support at 4.50 with resistance at 4.80.
For a look at our monthly market reports, visit Infinity Power Partner’s Market Overview.
Roadmap
NYMEX natural gas spot month (January) ended down by $0.036 at $6.245
Compared to close of last Friday
Cal 2023
Calendar 2023 settled lower by ≈$0.035 at $5.285
Compared to close of last Friday
Cal 2024
Calendar 2024 finished off by ≈$0.11 at $4.55
Compared to close of last Friday
The “Widow Maker” 2023
Volatility…
OUR TAKE ON THE MARKETS
NYMEX Natural Gas
The weight of 80-degree temperatures and uncertainty of when Freeport LNG facility will return to operation pushed the front of the natural gas curve to new lows. Winter cold will influence prices eventually. Both spot natural gas and calendar strips are at important support. We find waiting on procurement at current levels inordinately risky.
Looking ahead, the nature of risk management has undergone change with the jump of natural gas price due to Russian invasion of Ukraine. Without a return to Russian energy supplies, there is no reason to expect dramatically lower feed stock prices. The curves require attention, but the latitude of options has decreased. Risk management alternatives have grown to include both supply side and demand side strategies such as back up generation, battery storage, and alternative fuels. We expect this change to continue and encourage you to pay attention to changes.
WHOLESALE POWER
ERCOT
Heat rates have moved to recent highs as natural gas falls.
PJM
Prices continue to mirror natural gas.
This is the last edition of “Insights” for 2022
The next edition will be January 6, 2023
