Market Commentary

Weekly Recap

November 24, 2014

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  • Weather forecasts continue to monopolize the energy markets. Dramatic shifts in near term weather forecasts have sent natural gas prices for this winter (currently the December 2014 through March 2015 months) on a roller coaster. Meanwhile the remainder of the 12 month strip has been playing on the kiddie roller coaster and endured a much smoother ride as can be seen by the blue bars in the graph to the right.
  • The prompt month moved higher quickly to start the week and maintained its strength until an eventful Thursday. Price were strong on Thursday morning ahead of the inventory report (the first withdrawal of the season). With expectations for the week all over the board, some thought the 17 BCF withdrawal was above expectations and others below. As the day progressed, the bears seemed to have won as prices retreated but the prompt month suddenly surged towards $4.50 in the last hour of Thursday’s trading. The market subsequently ran out of steam and nosedived Friday.
  • The plunge has continued as of Monday morning as revised forecasts (see below right for NOAA’s) have warmed considerably. The prompt month is currently at $4.08 at 10:15 AM on Monday, November 24.
  • The fireworks from the natural gas market somewhat surprisingly did not spill over into power markets last week. Prices were rather flat last week in all markets tracked below with no market moving even 1%.
  • Please note that this week’s Inventory Report will be released on Wednesday, November 26 at noon EST due to Thanksgiving.