Infinity Insights – Volume 8, Issue 15

AT-A-GLANCE SUMMARY

Spot NYMEX natural gas (June) traded through $2.80/MMBTU and encouraged the bulls for a fleeting moment, then failed.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (June) has support at 2.60 with resistance at 2.80 then 2.90. Calendar year 2019 has support at 2.70 with resistance at 2.76. Calendar year 2020 has support at 2.69 with resistance at 2.76.For a look at our monthly market reports, visit Infinity Power Partner’s Market Overview.

Roadmap

NYMEX natural gas spot month (June) closed up 2.771, $0.004 firmer.

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What’s This? – The “Roadmap” is the price action chart depicting the NYMEX natural gas spot month. It’s important because it is essentially the trading community’s market sentiment.

Cal 19

Calendar 2019 finished lower by ≈$0.023 at $2.7475.

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What’s This? – “Cal 19” is the first complete 12-month strip. It gives you a visual of price action and provides a reference point for our take on the market.

Cal 20

Calendar 2020 settled off ≈$0.01 at $2.6975.

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What’s This? – “Cal 20” is the second complete 12-month strip. It gives you a visual of price action and provides a reference point for our take on the market.

OUR TAKE ON THE MARKET

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Spot NYMEX natural gas (June) traded through $2.80/MMBTU and encouraged the bulls for a fleeting moment, then failed. Indicators have turned favorable but price action just couldn’t make it higher (yet).The other curve involved in ERCOT wholesale power pricing, heat rates, made new highs up front. The driver is a continuing concern about resource adequacy this summer. The chart, below, paints the picture:Recently, we have visited with industry folks who are wrestling with the decision of how to structure through summer, particularly for loads who have enjoyed floating real time prices for years and profited from the much lower pricing. Consensus is that summer 2018 is dangerous and risk should be avoided. It’s a bitter pill to swallow, but prudent if what happens turns ugly.Further out, the curve has been defensive. However, note in the chart below that 2021 and 2022 are making highs while 2023 out are making new lows. Volatility is coming back and deserves a proactive stance for managing risk.