Market Commentary

Weekly Recap

January 26, 2015

Download PDF version of Market Commentary

  • The NYMEX natural gas market was officially closed on Monday for MLK Day, but that didn’t stop traders from keeping active. Over the course of Monday and Tuesday the 12 month strip shed over 20 cents while the prompt month February 2015 contract dipped almost 30 cents. The market spent the rest of the week trying to rally, but a bearish storage report brought another dip on Thursday. Friday finished out with trading circling the $3.00 mark leaving the prompt month down 4.5% on the week and the 12 month strip down 2.5%.
  • The storage deficit that was a regularly discussed topic in this commentary last year feels like a lifetime ago as inventories are now tracking only slightly below the 5 year average. A bearish withdrawal of 216 BCF was below expectations which were in the 220 range. While this did cause the market to shed its gains from earlier in the week, prices seem to be hesitant to dip below $2.80 as winter forecasts continue to cool.
  • Electricity pricing deviated from natural gas pricing last week and experienced relatively stagnant trading. While most markets saw a change of <1%, Ohio index points were almost completely flat. New York City was the one exception with gains of 1.7% on the week.
  • NOAA’s 6-10 day forecast seems to finally be experiencing a bit of consistency in that it hasn’t completely flipped week over week like we were accustomed to seeing earlier this winter. Deep cooling has entered the forecast in the Northeast and the warmer than normal temperatures in the west seem to be retreating.