Market Commentary

Weekly Recap

February 23, 2015

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  • The deep cooling of the country, which has seen temperatures reach subzero levels here in the Midwest, has been the big story on the NYMEX as trading has shifted to bullish trends after months of bearishness. By Friday’s settle, the prompt month was nearing $3.00 and the 12 month average had broken into the $3.10’s.
  • The winter 2015-2016 average was not quite as bullish as the front end of the strip last week. The winter moved up about a nickel to finish the week at $3.337.
  • Inventories reached a turning point last week when Thursday’s storage report brought news of a 111 BCF withdrawal. While the withdrawal was within expectations, the bigger takeaway is that current storage levels are now at a surplus to the EIA 5 year average for the first time since before the winter of 2013-2014.
  • After several weeks of the country being split down the middle with warmth in the West and cold in the East, the forecast has now shifted to cooling across the board with only a small area of above average temperatures in the Southeast.
  • Power pricing has followed bullish trends as well. Most regions were up between 2-3% last week, following just behind natural gas. The exception this time was the Pennsylvania/Maryland market which saw a 4% increase in pricing.