Infinity Insights – Volume 9, Issue 1

AT-A-GLANCE SUMMARY

It has been about 1 month since the last “Insights.”

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (February) has support at 2.90 with resistance at 3.25 then 3.50. Calendar year 2019 has support at 2.70 with resistance at 2.95. Calendar year 2020 has support at 2.72 with resistance at 2.80.For a look at our monthly market reports, visit Infinity Power Partner’s Market Overview.

Roadmap

NYMEX natural gas spot month (February) closed at $3.099, $0.654 lower compared to the close of December 14th.

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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 closed lower by $0.21 at $2.88.

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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 higher by $0.x04 at $2.75.

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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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It has been about 1 month since the last “Insights”. To refresh your memory, early cold spurred prices that spiked to near $5 in the spot month, driven by a short squeeze as much as anything. After triangulating for a month, price action broke down dramatically. For the last week+, price action appears to be building a bottom.Looking to the rest of the NYMEX natural gas forward curve, we note that prices are in a $.25 range between $ 2.90 and $2.65. These price levels continue to offer economic pricing for power procurement. Volatility has increased as the March/April (“Widow Maker”) spiked above 160 cents premium March and has since retraced to $.13 premium. Weakness at the front of the curve has strengthened the deferred values.Turning to ERCOT power marks, generation continues to be challenged by plant closures. Heat rate values have retreated from their recent highs, but not by much. Making money generating power has been challenging. With reduction of capacity (fewer generators), prices should firm, particularly during summertime. Flat curves are, on the surface, easy for pricing. That said, we see risk to the upside and value offered is economic.