Infinity Insights – Volume 9, Issue 4

AT-A-GLANCE SUMMARY

Despite very cold weather incursion (Polar Vortex), natural gas prices traded defensively over the past week, closing on new recent lows Friday.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (March) has support at 2.70 then 2.55 with resistance at 3.40 then 3.80. Calendar year 2019 has support at 2.78 with resistance 2.86. Calendar year 2020 has support at 2.66 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 (March) finished at $2.724, down $0.338.

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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 lower by ≈$0.19, ending the week at $2.795.

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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 fell by ≈$0.065, closing at 2.70.

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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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Despite very cold weather incursion (Polar Vortex), natural gas prices traded defensively over the past week, closing on new recent lows Friday. Spot month NYMEX rolled from February to March Tuesday with little change in price. March is the last winter month and is trading at long term support as the March 2019 monthly chart demonstrates:The “flatness” of natural gas curves is noted by the chart, below, that shows the first 7 calendar year strips are within $.25/MMBTU of each other:The other curves defining wholesale power in ERCOT, heat rates, have made new highs in the first 5 years and new lows past that.The times are changing. The commoditization of electricity (low prices, large commercial players dominating the trade) makes the outlook for what the emerging landscape is becoming as one of inexpensive feedstock but pricey capacity. Retail Electric Providers (REPs) are adjusting to the new face of business. They are actively pursuing long term Power Procurement Agreements (PPAs) below what’s offered for near term, market defined power. Interesting.Focus has changed to promoting associated “things” related to power delivery and usage (https://www.foxnews.com/tech/google-amazon-seek-foothold-in-electricity-as-home-automation-grows). Note that expectations are for the 800 pound gorillas (Google, Amazon) to jump into the fray. We see this as confirmation of changes .in the wind. (https://www.wsj.com/articles/google-amazon-seek-foothold-in-electricity-as-home-automation-grows-11548604800).What do we all need to do in this changing environment? Our answer is to continue to secure economic procurement. In addition, stay abreast of changes, both good and bad, and plan accordingly.