Market Commentary

Market Commentary

Weekly Recap - Week Ending 06/17/2016

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

After a couple of weeks of bullishness the NYMEX natural gas market faced some resistance last week as the prompt month hesitated to get above $2.60 for the majority of the week. It ultimately succeeded, settling at $2.623 on Friday, and as of the time of writing on Monday has climbed an additional dime.

LAST WEEK ON THE NYMEX

The 12 month average worked a bit opposite of the prompt month last week. A slight discount to the winter 2016/2017 strip outweighed the upward movement of the front end of the curve, and the 12 month average ended up losing a little over a penny on the week.

NATURAL GAS IN US STORAGE

Last week’s injection into natural gas storage came in at 69 BCF, which was on the higher end of expectations, but 27 BCF below last year and 18 BCF below the EIA 5-year average. Inventories crossed the 3 TCF mark as well with a little less than 5 months left in the official injection season.

WEEKLY COMMODITY CHANGES IN POWER MARKETS (c/kwh)

On the power side, there were a couple of conflicting factors that traders had to weigh against each other last week. On the bullish end, the EIA updated their Annual Energy Outlook, which projected some slight increases in demand, while a lack of outages year-to-date and moderate weather so far this season has pushed prices downward.

NOAA 6-10 DAY OUTLOOK

However, forward looking weather has turned to well above average recently. The NOAA 6-10 day outlook has the vast majority of the country expecting bullish temperatures, including the key consuming region of Texas, but it is worth noting that there are some cool-to-normal forecasts for the Northeast consuming regions as well.

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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