Weekly Recap- Week Ending 12/2/2016
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Daily Natural Gas Settlements
Natural gas continues to demonstrate why it is often referred to as the most volatile commodity. Forecasts calling for some below normal temperatures in December have helped ignite a pretty substantial rally in the natural gas futures market.
Last Week on the NYMEX
Last week featured a dramatic 35.1 cent, or 11.4%, increase for the prompt month and an equally impressive 15 cent (4.7%) jump for the 12 month strip average. Each day last week featured increases except for Friday, which saw a modest retreat following a more than 15 cent advancement in the prompt month on Thursday.
Natural Gas in U.S. Storage
Thursday’s significant rise was in large part due to the inventory report that was released at its usual 10:30 am time. The report revealed a 50 BCF withdrawal which was right in line with expectations but still higher than the 5 year average withdrawal for that week of 44 BCF.
NOAA 6-10 Day Outlook
The 6-10 day forecast map from NOAA shows a vast majority of the country in a shade of blue indicating colder than normal temperatures. 8-14 day forecast maps are suggesting that the cold will linger into that time period as well. Clearly weather forecasts are driving the natural gas market each day.
Weekly Commodity Changes in Power Markets (c/kwh)
Power prices have been exceptionally volatile as well, especially for this winter. While the month strip prices have displayed consistent gains over the past couple weeks, January and February prices specifically have undergone some intense bullish news in the face of some colder than normal forecasts. It is important to remember that nearly as much power is consumed in January as is consumed in any given month in the heart of the summer.
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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