Infinity Insights – Volume 9, Issue 5
AT-A-GLANCE SUMMARY
Natural gas prices continued lower this week, finding support at $2.50ish for the NYMEX spot month (March).
SUMMARY OF THE LAST WEEK IN CHARTS
Spot month natural gas (March) has support at 2.70 then 2.55 with resistance at3.40 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.
RoadmapNYMEX natural gas spot month (March) closed at $2.583, down $0.151.
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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 19Calendar 2019 was off by ≈$0.06, settling at $2.73.
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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 20Calendar 2020 finished higher by ≈$0.02, ending the week at $2.72.
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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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Natural gas prices continued lower this week, finding support at $2.50ish for the NYMEX spot month (March). Indicators we follow are signaling weakness: March/April spread – “Widowmaker”, calendar year spreads, front-back spreads. The most bullish feature we see is that the market is oversold.A subtle change is worth mentioning: ERCOT heat rates are toppy. There’s been sufficient test of the highs without follow through to suggest those values attract capacity selling.All of this might mean economic pricing if taken by itself (financial offering). However, the net cost of power isn’t enjoying this degree of lowering of wholesale as delivery costs are climbing. Very little of this higher cost is manageable or at least easily manageable. One can watch peak demand and see if it can be effectively reduced (4CP), but most loads’ are challenging. It’s hard to ask a commercial building to cut back usage for incremental savings. The times continue to change.