Infinity Insights – Volume 8, Issue 9

AT-A-GLANCE SUMMARY

NYMEX spot natural gas continues to trade in a narrow range bounded by 2.50ish and 2.80ish.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (April) has support at 2.50 with resistance at 2.75 then 2.90 Calendar year 2019 has support at 2.73 with resistance at 2.85. Calendar year 2020 has support at 2.74 with resistance at 2.83.For a look at our monthly market reports, visit Infinity Power Partner’s Market Overview.

Roadmap

NYMEX natural gas spot month (April) closed up $0.037 at $2.722.

1

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 likewise was up ≈$0.025 at $2.85.

2

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 was lower ≈$0.005, settling at $2.75.

3

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 natural gas continues to trade in a narrow range bounded by 2.50ish and 2.80ish. The forward curve of natural gas likewise remains flat and steady. Volatility is not significant. ERCOT power prices, on the other hand, are more volatile, such volatility coming from an active heat rate market (capacity concerns for summer 2018 still in everyone’s mind). We suspect that the interactions between both curves will continue along current patterns.Moving to power industry rules and regulations, FERC Order No. 841 looms large as a game changer where storage can participate in the capacity, energy and ancillary services markets operated by Regional Transmission Organizations and Independent System Operators. This allows new technologies (energy storage) to be available for managing risks and opportunities heretofore limited to the old ways of doing things. We believe this will smooth out basis anomalies while complying with EPA considerations. The longer term view of where this goes is work in progress.