Market Commentary

Market Commentary

Weekly Recap- Week Ending 1/20/2017

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

Last week was a short week on the NYMEX as the market was closed Monday in observance of Martin Luther King Jr. Day. Wednesday and Friday saw the market make its biggest moves of the week and both featured aggressive downward drops.

Last Week on the NYMEX

After a quiet Tuesday, the February 2017 contract shed 11 cents on Wednesday. Forecasts for the end of January continue to call for warmth which is igniting downward pressure. Friday saw an even larger drop of more than 16 cents. It seems nobody wanted to be long gas over the weekend as the market continued to fall throughout Friday. By week’s end, the prompt month had shed 21.5 cents and the 12 month average had dropped 15.5 cents.

Natural Gas in US Storage

The only increase of the week came on Thursday when a bullish storage report was released. The report saw a withdrawal slightly above expectations. As you can see, storage is currently on pace with the 5 year average but should soon be above the average once the impact of the recent warm weather shows itself in the form of lower storage withdrawals.

NOAA 6-10 Day Outlook

The 6-10 day forecast, which now spreads into February, shows less warmth than previous weeks but still is by no means cold for the major consuming regions of the Midwest and Northeast. While the West continues to see snow and the South endures some brutal storms including deadly tornadoes, the Midwest and Northeast have had a relatively quiet January. In fact, according to some reports, January 2017 will wind up being the second warmest January of the past 40 years.

Weekly Commodity Changes in Power Markets (c/kwh)

Somewhat surprisingly, power prices in PJM markets were not nearly as volatile last week as their natural gas counterparts.

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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