Market Commentary

Weekly Recap

June 16, 2015

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  • Last week the NYMEX natural gas market followed somewhat of a hill shape. It spent the first few days of the week in a surge, gaining over 30 cents on the prompt month while gaining over 21 cents on the 12 month average. However, this trend re-versed on Thursday with the market continuing to be range bound between $2.50 and $3.00. By the end of trading Friday, the prompt month had fallen back down to $2.75 and the 12 month average was struggling to stay above $3.00.
  • The winter 2015-2016 strip gained just over 14 cents on the week to settle at $3.155, a move of 4.7%. It is not uncommon for the market to experience some bullishness in the summer-time as traders attempt to balance production levels and current inventories with forecasted winter demand.
  • Thursday’s storage report announced a 111 BCF injection into natural gas storage. This number is only 2 BCF more than last year’s injection at this time, but is well above the EIA 5 year average of 89 BCF. Traders reacted accordingly with bearish market movement on Thursday and Friday.
  • NOAA’s 6-10 day forecast has things heating up along the coastal regions of the country and parts of the northeast con-suming area. However, power prices have been hesitant to spike upwards with long term summer forecasts continuing to show cooler than normal weather.
  • Because of this, most power markets were up only slightly last week. The Chicago market area led the group gaining 1% on the week.