Infinity Power Partners - Volume 11, Issue 34

Written By Guest User

AT-A-GLANCE SUMMARY

The parallels between “Ida” / “Nicholas” and “Katrina” / “Rita” continue.

SUMMARY OF THE LAST WEEK IN CHARTS

Spot month natural gas (October) support is 5.00 then 4.50 with resistance at 6.00. Calendar year 2022 finds support at 4.00 with resistance at 4.50. Calendar year 2023 has support at 3.10 with resistance at 3.50.

Roadmap
NYMEX natural gas spot month (October) settled $0.167 higher at $5.105 compared to last Friday’s Close.

Calendar 2022 Calendar 2022 closed ≈$0.0575 off at $4.0525.

Calendar 2022
Calendar 2022 closed ≈$0.0575 off at $4.0525.

Cal 2023 Calendar 2023 ended ≈$0.055 lower at $3.245.

Cal 2023
Calendar 2023 ended ≈$0.055 lower at $3.245.

OUR TAKE ON THE MARKET NYMEX Natural GasThe parallels between “Ida” and “Nicholas” and “Katrina” and “Rita” continue. Prices are nearing $6.00 for spot October and Calendar 2022 is nearing 4.50.   Every indicator we follow points higher:Supply/demandExtreme weather (more often and more intense)InflationMarket biasTechnical pictureFlattening curve – natural gas is no longer just a winter heating commodityWe see nothing bearish except that market is over-bough. When asked when this action will fade, our answer is “we don’t know”. No one does. Risk management includes both capture of lower prices when available and avoidance of higher prices when prompted.   The Widow Maker   We discussed “The Widow Maker” in earlier “Insights.” It’s the March/April spread that has “killed” many traders with extreme moves (March is the last winter month and April is the first refill storage month, also referred to as a shoulder month). The dynamics are such that moves are directional and run over folks who top pick and overstay their welcome. Likewise, when it turns, the fall is just as sharp.  It is also a very good indicator of relative bullishness.   This chart provides a continuing picture of relative strength:

OUR TAKE ON THE MARKET


NYMEX Natural Gas

The parallels between “Ida” and “Nicholas” and “Katrina” and “Rita” continue. Prices are nearing $6.00 for spot October and Calendar 2022 is nearing 4.50.
 
Every indicator we follow points higher:

  • Supply/demand

  • Extreme weather (more often and more intense)

  • Inflation

  • Market bias

  • Technical picture

  • Flattening curve – natural gas is no longer just a winter heating commodity

We see nothing bearish except that market is over-bough. When asked when this action will fade, our answer is “we don’t know”. No one does. Risk management includes both capture of lower prices when available and avoidance of higher prices when prompted.
 
The Widow Maker
 
We discussed “The Widow Maker” in earlier “Insights.” It’s the March/April spread that has “killed” many traders with extreme moves (March is the last winter month and April is the first refill storage month, also referred to as a shoulder month). The dynamics are such that moves are directional and run over folks who top pick and overstay their welcome. Likewise, when it turns, the fall is just as sharp.  It is also a very good indicator of relative bullishness.
 
This chart provides a continuing picture of relative strength:

WHOLESALE POWER ERCOTHeat rates continue to slide lower, offsetting to some degree natural gas strength. Prices move higher regardless.PJMPrices follow natural gas higher.

WHOLESALE POWER


ERCOT

Heat rates continue to slide lower, offsetting to some degree natural gas strength. Prices move higher regardless.

PJM

Prices follow natural gas higher.

Guest User
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