Infinity Insights - Volume 12, Issue 6

AT-A-GLANCE SUMMARY

Spot month NYMEX natural gas price has dropped about $2 from its recent highs and $4 from the

short squeeze high earlier this year.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (March) support 3.60 with resistance at 4.40. Balance of Calendar year 2022 finds support at 3.60 with resistance at 4.50. Calendar year 2023 has support at 3.65 with resistance at 3.90.

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

Roadmap

NYMEX natural gas spot month (March) closed down by $0.631 at $3.941 compared to last Friday’s close.

Balance of Calendar 2022
Balance of Calendar 2022 finished lower by ≈$0.5275 at $4.12.

Calendar 2023
Calendar 2023 settled off by ≈$0.105 at $3.575.

OUR TAKE ON THE MARKET

The “Widow Maker”

Volatility…

NYMEX Natural Gas

Spot month NYMEX natural gas price has dropped about $2 from its recent highs and $4 from the short squeeze high earlier this year. Open interest also dropped by more than 10%, indicating the move has been led by long liquidation. Lack of follow-through cold weather plus lessening concern about supply are mentioned as causal issues. The back of the curve has maintained notable strength, likely a result of bear spreads. So where from here?

$3.60 area is strong support as viewed from a continuation perspective.

The front of the forward curve has moved from strong backwardation (bullish configuration) to basically flat, a further sign of weakness. Conventional wisdom suggests buyers wait until price action looks bottoming. We agree.

WHOLESALE POWER

ERCOT

Power prices continue to follow natural gas.

PJM

Power prices continue to follow natural gas.