Market Commentary

Weekly Recap

May 5, 2014

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  • For the second straight week, the prompt month finished the week virtually unchanged from where it started. This week however featured slightly more volatility throughout the week than last week did.
  • Tuesday marked the final day of trading for the May 2015 futures contract. It expired at $4.795 per MMBtu. This expiration price was more than twenty cents higher than April’s ($4.584) and about sixty cents higher than May 2013’s expiration price ($4.152)
  • The biggest move of the week last week came on Monday. A new round of cold forecasts suggested to many traders that injections will be minimized if weather continues to persist. The bullish news brought the market almost fifteen cents higher towards $4.80.
  • The $4.80 level proved to be an important one to technical traders. It was a key point on the charts and ultimately the market could not sustain pricing north of $4.80 even though it tried for a couple of days. Until the next major news breaks, the market seems content around the $4.65-$4.80 level.
  • Thursday’s storage report came in slightly higher than expected as 82 BCF was injected into storage. The market initially reacted bearishly as the report exceeded expectations and the prompt month dropped almost a dime at days end.
  • Power prices surged last week as you can see in the chart to the right. While the gas market moved less than 1%, the power markets moved 3%-6% higher. With the summer approaching, the next page offers a more in depth look at power pricing.