Infinity Insights – Volume 8, Issue 40

AT-A-GLANCE SUMMARY

NYMEX spot month (December) evidenced the exceptional cold incursion by spiking to near $5.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (December) has support at 3.90 then 3.55 with resistance at4.45 then 4.90. Calendar year 2019 has support at 2.92 with resistance at 3.25. Calendar year 2020 has support at 2.67 with resistance at 2.75.For a look at our monthly market reports, visit Infinity Power Partner’s Market Overview.

Roadmap

NYMEX natural gas spot month (December) closed at $4.272, higher by $0.553

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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 up ≈$0.11 at $3.08.

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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 closed lower by ≈$0.035 at $2.665.

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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

NYMEX spot month (December) evidenced the exceptional cold incursion by spiking to near $5. Price action was straight up, then straight down. Rumor has it that traders who shorted the market scrambled to get out. Panic and emotion are not good basis for technical analysis other than alerting all to take heed of a dangerous market.Our clients are not trading the market, but rather attempting to manage power procurement risk. They’re short until they cover that short by locking in price or floating LMP (real time market). We purposely avoid the front of the curve and the possible volatility of prices. The back of the curve continues to offer value.

“Widowmaker”

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You have heard the term “Widowmaker” from this site before. It’s the March/April spread. This is a spread between the last month of winter and the first month of refilling of storage. Ordinarily, it isn’t dramatic. This year, it’s been very dramatic as the chart below depicts:You can see that price delta tripled literally overnight. The intrusion of cold weather spiked this winter prices. It may not be over. That said, the volatility and wide range are very risky.