Infinity Insights – Volume 9, Issue 40
AT-A-GLANCE SUMMARY
Colder weather and what may have been a short squeeze pushed spot-month NYMEX natural gas (December) to $2.90 resistance.
SUMMARY OF THE LAST WEEK IN CHARTS
Spot month natural gas (December) has support at 2.74 with resistance at2.90. Calendar year 2020 has support at 2.45 with resistance 2.58. Calendar year 2021 has support at 2.42 with resistance at 2.50.For a look at our monthly market reports, visit Infinity Power Partner’s Market Overview.
RoadmapNYMEX natural gas spot month (December) closed at $2.789, off $0.032.
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.
Calendar 2020Calendar 2020 finished ≈$0.0325 firmer at $2.5475.
What’s This? – “Cal 2020” 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 2021Calendar 2021 settled off ≈$0.008 at $2.476
What’s This? – “Cal 2021” 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 Natural GasColder weather and what may have been a short squeeze pushed spot month NYMEX natural gas (December) to $2.90 resistance. It has backed off and found initial support at 2.74. This level is also the upper end of a gap, one that followed the gap two weeks ago at 2.48.Gaps (and even more so, double gaps) are usually a strong signal. In the current instance, we note that open interest has decreased, not increased. This is important as it suggests that new buying hasn’t been any more important than short covering. Weather continues to be supportive.
WHOLESALE POWER
ERCOTPrices have risen significantly from their lows of mid-August.Higher heat rates have been joined by higher natural gas prices. The rise has been in all tenors (years). Do you lock prides here to avoid higher prices or do you wait for the normal after-winter sell-off? Good question, hopefully, one you don’t worry about having locked earlier.PJMPrices for PJM continues to reflect winter premium to what is a manageable curve.