Market Commentary

Weekly Recap

March 2, 2015

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  • Last Wednesday brought the expiration of the March 2015 natural gas futures contract. The contract expired at $2.894, just a few pennies above February’s contract expiration. April 2015 began trading as the prompt month on Thursday and experienced a drop of 16.5 cents on the day.
  • The NYMEX also experience bearishness on the 12 month aver-age, which dipped 5% on the week to settle below $3.00. The winter 2015-2016 average shed 15.5 cents, a drop of 4.6%.
  • With the expiration of the March 2015 contract also came the finalization of the winter 2014-2015 average. The winter strip came out to $3.392. This is more than a dollar below the winter 2013-2014 average which settled at $4.427.
  • Thursday’s storage report announced a withdrawal of 219 BCF. While this was the second largest withdrawal this year and well above the 5 year average, the withdrawal was still below expectations and the market reacted accordingly with the 12 month average falling below $3.00.
  • Colder than normal weather is still in the forecast for most of the country, but the West has shifted back to expectations of warmer weather. With one more official month of winter left there continues to be an increase in forecasted demand, but traders have continued to balance this against strong production which has helped prevent bullishness on the NYMEX.
  • Power prices continued to follow natural gas prices last week. PJM markets fell between 2.5-3% and New York City dipped 1%. on the week.