Market Commentary

Market Commentary

Weekly Recap- Week Ending 11/9/2018

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.

Last Week on the NYMEX

Last week featured two major moves on the NYMEX on Monday and Friday.  The prompt month December contract gained more than 28 cents on Monday on the heels of new cold weather forecasts.  A couple of relatively quiet days mid-week were then followed by a 17.6 cent gain on Friday.  Again shifting forecasts were cited for fueling the rally.

U.S. Dry Gas Production Per Day

By week’s end the prompt month had gained more than 13% and the 4 month Dec 18—Mar 19 winter strip had added 11.5%.  Prices for April 2019 and beyond were far less impacted which helped limit the increase in the 12 month strip average to under 6%.

Natural Gas in US Storage

Last week looks calm compared to this current week.  Monday featured another 6.9 cent gain for the December contract and Tuesday brought a 31.3 cent rally.  As of 10 am on Wednesday, Nov. 14, the prompt month is up an additional 35 cents to $4.45 after briefly eclipsing $4.92 in overnight trading.  The total impact through under 2.5 days of trading is up to 73 cents for the prompt month and the 8 day total is more than $1.15 or a 35.5% increase.

NOAA 6-10 Day Outlook

The rally has been across the entire winter, but April 2019 has gained just 6.4% and May 2019 only 3%.  Obviously weather forecasts are the primary driver, but speculators continue to add to their long positions which is only adding to the overwhelming bullish sentiment.

Weekly Commodity Changes in Power Markets (c/kwh)

Like natural gas, power prices for the winter have been extremely volatile.  12 month strip averages were up across the board and were most volatile in the Northeast markets which tend to be more sensitive to larger swings in pricing.  New England and New York City 12 month strip averages tacked on 5% and 4.7% respectively last week and continue to jump this week as well.

The above comments regarding the NYMEX futures market are for illustration purposes only and the sole opinion of the author and not IGS Energy, its officers or its employees. Neither the author nor IGS Energy shall be liable for any information contained herein. This communication is no way intended to provide guidance or recommendations as to the value of or advisability of trading in any contract of sale of a commodity for future delivery, security futures product, or swap.

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