Market Commentary

Weekly Recap

July 7, 2015

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  • On Friday, June 26th, the July 2015 prompt month contract expired at $2.773. This expiration came less than a nickel under June 2015’s expiration of $2.815. With the August 2015 contract now trading between $2.78-$2.84, it seems that traders have valued summer gas around $2.80 until something fundamentally changes.
  • Last week was full of fireworks throughout the country, but none of this excitement was seen on the NYMEX natural gas market. The market was near flat throughout the week. The prompt month continued to be range-bound, the 12 month average continued its attempt to fall below $3.00, and the winter 2015-2016 average continued to trade in the upper-$3.10’s. The market was closed on Friday in observation of the Independence Day holiday.
  • Forecasts have flipped to some extent with Texas and the central area of the country now expecting some above average temperatures. However, the Northeast and Southwest have cooled off some and traders seem hesitant to react strongly to either of these changes.
  • An injection of 69 BCF into storage continued the recent trend of injections coming in around the low end of expectations. Inventories are right in line with the EIA 5-year average and analysts still expect to be above 4 TCF by the winter time.
  • Some minor bearish movement on the power market last week was led by the New York City market which dropped 2.4%. Most markets dropped less than 1%.