Market Commentary

Market Commentary

Weekly Recap - Week Ending 04/29/2016

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

The May 2016 natural gas contract expired Wednesday at $1.995. The contract circled the $2.00 mark for weeks before ultimately settling a hair below it. The June 2016 contract picked up right where May left off, but surged a bit toward the end of the week settling at $2.178.

LAST WEEK ON THE NYMEX

Range-bound trading continued to dominate the market last week with the prompt month fluctuating between $2.00 and $2.20. Recent bearish factors such as a very warm winter, high inventory levels, and record setting production have driven the front end of the 12 month strip downward while the backend remains at, or above, $3.00. These conditions have created a large gap between the prompt month and the 12 month average. The two settled the week over 55 cents apart.

NATURAL GAS IN US STORAGE

It would appear that the delayed winter weather has finally fizzled out and withdrawals are now behind us. Last week’s injection of 73 BCF into natural gas storage came in right around expectations after the warmest week since October.

NOAA 6-10 Day Outlook

A warm North and a cool South is the story heading into next week according to the NOAA 6-10 Day Outlook below. Some heat in the Northeast could impact power prices as we start into the summer months while a cool Texas could cause opposite reactions.

WEEKLY COMMODITY CHANGES IN POWER MARKETS (c/kwh)

Most power markets were just a bit bearish last week with around 1% decreases in pricing in OH and PA. Chicago held steady with no change and New York was the major outlier jumping up 6%, largely due to a couple of key generators being down for maintenance.

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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