Weekly Recap- Week Ending 2/17/2017
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Daily Natural Gas Settlements
Last Monday saw natural gas prices for the March 2017 prompt month contract fall below $3 for the first time since before Thanksgiving 2016. The lack of winter is finally taking its toll on the NYMEX, which was very hesitant to make this fall below $3. However, the weight of the warmth could not be ignored and the inevitable finally occurred.
Last Week on the NYMEX
The rest of the week saw little in the way of bullishness. With weather forecasts continuing to call for extremely above normal weather, expected gas in storage at the end of the winter continues to increase. While not pictured, the 15 day forecast continues to call for warmer than normal temperatures across the eastern half of the country.
Natural Gas in US Storage
Thursday’s storage report revealed a withdrawal of 114 BCF, which was about 10 BCF lower than expected. That bearish withdrawal helped ignite an additional sell-off on Thursday. Current inventory levels are approaching 100 BCF higher than the 5 year average, but are still about 300 BCF lower than last year.
NOAA 6-10 Day Outlook
With the weather forecasts as warm as they are, energy analysts are paying very close attention to where inventories finish the winter season and how that compares to the historical benchmarks. Most recent prognostications are for ending inventory to be about 1,900 BCF.
Weekly Commodity Changes in Power Markets (c/kwh)
While 12 month strip natural gas prices shed more than 5% last week, power markets dropped less than 1%. It is a bit surprising to see power markets not closely mimic the gas market and it is some thing that we will certainly be keeping a close eye on in the immediate future.
The comments made above regarding the NYMEX futures market are the sole opinion of the author, not necessarily the opinions of Interstate Gas Supply, its officers or its employees. Information provided in this “Market Update” is for illustration purposes only, and neither the author nor Interstate Gas Supply shall be liable for any information contained herein.
IGS Energy provides weekly analysis and market updates on industrial and commercial natural gas news. We cover natural gas prices, futures, and national storage information, giving you the most accurate market data.
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