Market Commentary

Market Commentary

Weekly Recap- Week Ending 10/13/2017

Stay up to date on the latest information and changes that may impact natural gas and electricity pricing with the Market Commentary. Download a PDF version of this week’s Market Commentary here.

Daily Natural Gas Settlements

Last week started where the previous week finished with the natural gas market descending. The prompt month November 2017 contract shed another three cents last Monday to close at $2.833. That meant that over the 16 trading days from 9/18/17 through 10/9/17 the prompt month had dropped 31.3 cents, or 10%. Warm weather throughout “Aug-tober” (according to some forecasters) was the primary driver of the multi-week slide.

Last Week on the NYMEX

The rest of the week saw a complete reversal of the downward trend as Tuesday and Thursday each saw sizeable bumps up in pricing. Perhaps market participants felt the sell-off was overdone and a correction was necessary. By week’s end, the prompt had settled at $3.00 and was up almost 5%. The upcoming winter finished at $3.19 while the 12 month strip average closed at $3.07 after dip-ping below $3 earlier in the week.

Natural Gas in US Storage

Thursday’s market increase came despite an 87 BCF injection, which was within expectations and equal to the five year average injection for the same week. Analysts are confident, at this point, that we will finish the injection season with more than 3.8 TCF of storage, which will be plenty sufficient. The high confidence in ample storage means the next couple of weekly reports will only be impactful if they come in lower than expected and could spook the market a bit higher. Even if injections come in above expectations, full storage has already been priced into the market, which means further downside as a result of storage is unlikely.

NOAA 6-10 Day Outlook

Weather forecasts for the remainder of the month continue to show significantly warmer than normal weather. At this point in the year, that means less demand for natural gas for heating.

Weekly Commodity Changes in Power Markets (c/kwh)

Electric prices in all markets continued to follow natural gas.

The comments made above regarding the NYMEX futures market are the sole opinion of the author, not necessarily the opinions of Interstate Gas Supply, its officers or its employees. Information provided in this “Market Update” is for illustration purposes only, and neither the author nor Interstate Gas Supply shall be liable for any information contained herein.

IGS Energy provides weekly analysis and market updates on industrial and commercial natural gas news. We cover natural gas prices, futures, and national storage information, giving you the most accurate market data.

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