Market Commentary

Market Commentary

Weekly Recap- Week Ending 9/16/2016

Stay up to date on the latest information and changes that may impact natural gas and electricity pricing with the Market Commentary. Download a PDF version of this week’s Market Commentary here.

Daily Natural Gas Settlements

Monday’s trading last week set the tone for the entire week. The prompt month rocketed up nearly 12 cents to $2.915 per MMBtu. It then spent the rest of the week flirting with testing the $3 threshold although it never crossed that plateau.

Last Week on the NYMEX

The highest prompt month settlement last week came on Friday at $2.948. That brought the net gain for the week to north of 15 cents or 5.4%. The upcoming winter’s strip and the 12 month strip were also up about 3% each.

Last week 12 month strip prices in PJM markets were up 1.4% to 1.8% while New York City pricing actually dropped. Yet another reminder just how disparate energy prices are in New York City from much of the rest of country.

NOAA 6-10 Day Outlook

Many of the same factors that have been in play continue to be the driving force behind the market’s recent surge. Weather forecasts continue to show above normal weather. At this point, warmer than normal temperatures are forecasted through the end of September for the entire eastern half of the country. The east consumes far more energy than the west.

Natural Gas in US Storage

The follow through impact of warm weather is that the increased demand for natural gas for power generation means there is less gas available to be injected into storage. As such, the massive surplus of inventories compared to last year has dwindled from 874 BCF at the start of the summer to under 300 BCF right now. This past week marked the 20th consecutive week in which the injection was smaller than the injection during the same week of the previous year.

Weekly Commodity Changes in Power Markets (c/kwh)

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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