Market Commentary

Weekly Recap

January 19, 2015

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  • Natural gas prices last week somewhat resembled the Ohio State Buckeyes experience in the national championship game last Monday night. Natural gas started the week on a down note before quickly building upside momentum and blocking away all impeding obstacles. OSU fell down 7-0 early on before turning things around even as untimely turnovers made things more difficult than necessary.
  • More forward looking, both natural gas and OSU have strong supplies (OSU at quarterback and natural gas in the form of shale production) for the foreseeable future. This causes a slight deviation in their future as the Buckeyes look to be gaining steam while natural gas has more downward momentum.
  • Electric prices gained ground (2%-3% in most markets listed below) on the heels of the 2.5% increase in the 12 month natural gas strip. As usual, power prices in New York saw the most volatility.
  • Forecasts for near term weather are all aligning similarly to the NOAA forecast presented on the bottom right. Above normal temperatures in the Western half of the country are juxtaposed to below normal temperature forecasts for the key consuming regions in the Northeast and Midwest.
  • Last week brought by far the largest withdrawal from storage of the winter season so far. The 236 BCF withdrawal was above consensus expectations in the market and helped the NYMEX stay strong late in the week. However, as a reference point, the 2013-2014 winter saw five separate weeks endure a withdrawal of more than 236 BCF.