Market Commentary

Weekly Recap

March 23, 2015

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    • After a very small dip on Monday, the NYMEX spent a couple of days in an upward trend. By Wednesday’s settle the prompt month had gained just over 20 cents and the 12 month average had broken through $3.10. This trend was reversed on Thursday and by the end of the week the market had shed much of its earlier gains to settle about 2% higher than the prior week.
    • The winter 2015-2016 strip has been trading in the mid $3.10’s to mid $3.20’s range for about a month now. Last week the strip settled at $3.202 which was up about a nickel from the week prior. It will be important to track this strip as we come out of the withdrawal season and start to get a feel for what the storage picture might look like by the start of next winter.
    • Last week’s withdrawal of 45 BCF from storage was spot on with the EIA’s 5 year average but just a bit under expectations. While this week may be another slight withdrawal, it would not be unexpected if this week’s storage report brings with it the start of the injection season. All eyes will be on production and summer heat as most analysts believe we could break through 4 TCF by winter time.
    • As noted last week, cooling in the forecast during this shoulder period between winter and summer could keep heaters on just a bit longer than usual but will not likely create massive price swings on the NYMEX.
    • Power prices were fairly quiet last week with most markets gaining around 1% on the week. NYC was the exception and shed 1.6% on the week.