Infinity Insights - Volume 13, Issue 24

AT-A-GLANCE SUMMARY

Spot natural gas continues to be range-bound, trading between $2.40 and $3.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (August) support at 2.40 with resistance at 3.00. Calendar year 2024 finds support at 3.40 with resistance at 4.00. Calendar year 2025 has support at 3.90 with resistance at 4.35.

Roadmap

NYMEX natural gas spot month (August) finished higher by $0.174 at $2.713

Compared to close of last Friday

Cal 2024
Calendar 2024 settled up by ≈$0.01 at $3.59

Compared to close of last Friday

Cal 2025
Calendar 2025 closed better by ≈$0.03 at $3.865

Compared to close of last Friday

The “Widow Maker”

2024

Volatility…

OUR TAKE ON THE MARKETS

NYMEX Natural Gas

Spot natural gas continues to be range-bound, trading between $2.40 and $3. The severity of current heat is the focal point, with adequacy of power generation the issue. Market concerns with the cost of generation evidenced in the path for heat rates in specific jurisdictions (see Wholesale Power, below).

Weather extremes once believed as singular events are becoming more common place. We view this as the new norm and needs to be part of risk management planning. That said, buying low prices when and where found is always a good thing.

WHOLESALE POWER

Heat rates are the differentiators of relative demand, jurisdiction to jurisdiction as evident in the charts, below. Note the extreme highs for front of the curve ERCOT values. Allowing for market-driven pricing seems to provide sufficient generation reserves. This compares to the past when real time prices would see wide swings a la the St. Valentine’s freeze of 2021. Recognizing that a price must be paid, the current way of things provides transparency and sets realistic expectations.