Infinity Insights – Volume 8, Issue 19
AT-A-GLANCE SUMMARY
Over the past two weeks, natural gas, heat rates (ERCOT), and wholesale power (ERCOT) have made new highs.
SUMMARY OF THE LAST WEEK IN CHARTS
Spot month natural gas (July) has support at 2.90 then 2.80 with resistance at 3.00. Calendar year 2019 has support at 2.75, then 2.67 with resistance at 2.81. Calendar year 2020 has support at 2.65 with resistance at 2.72.For a look at our monthly market reports, visit Infinity Power Partner’s Market Overview.
Roadmap
NYMEX natural gas spot month (July) was better by $0.083 and closed at 2.962 compared to the close two weeks ago.
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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 was higher by ≈$0.055 at $2.81.
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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 finished at $2.708, ≈$0.02 better.
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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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Over the past two weeks, natural gas, heat rates (ERCOT), and wholesale power (ERCOT) have made new highs. Weather and generation adequacy concerns are most often mentioned when asked, “Why?” Volatility has increased and open interest has grown during this period.It’s interesting to visit with market professionals as many say that this is just the tip of the iceberg while others opine that the market discounted bad things happening and ran too far too fast. Our opinion is to respect the move from the sidelines (our clients have fixed prices).Looking at ERCOT wholesale power, note the wide range of calendar year prices with nearby making highs while deferred is making lows.This is a backwardated curve. It is a bullish tell. Will prices weaken after the summer? Key question.