October 22, 2018

This time of year typically inspires little heating and cooling demand which means natural gas and electricity prices should go down due to less demand. That has not held true in 2018 as we are experiencing the largest natural gas storage deficit in history. This is not new intelligence, rather, over the summer the market appeared content with expectation...

June 20, 2018

Since early February 2018, natural gas has been on a steady incline. In the short term, power burn (natural gas used to generate electricity) remains elevated y-o-y as increases in cooling demand in May/June have increased demand and stymied natural gas storage injections (Power Burn accounts for about 50% of natural gas demand). Additionally, coal-to-gas...

May 10, 2018

Yesterday, the 2020-23 calendar year strips for natural gas contracts hit their all-time lows, trading at $2.647, $2.667, $2.716, and $2.784, respectively. Meanwhile, the near-term prices for the prompt month contract (June) and the twelve-month strip (June-May19) remain range-bound, trading off end-of-summer natural gas storage projections and summer wea...

April 13, 2018

Despite lingering cold weather and historic natural gas storage deficits, the market continues to view the ramp up in production as sufficient expected supply for the coming winter.

With storage projected to rebound over the summer leaving 2018-19 winter with an estimated 3.8 tcf of gas, market participants are anxiously awaiting updates on the summer weat...

March 8, 2018

March has come in like a Lion, pushing precipitation and temperature forecasts higher than previously reported via two separate weather events dominating the east coast from DC up the I-95 corridor. This, coupled with cold snaps in the Great Lakes region has increased the forecasted Heating Degree Days for March, resulting in further depleted natural gas...

February 15, 2018

Record natural gas production, higher oil prices, and weak winter heating demand have come together to push the prompt month natural gas contract down 20% since the end of January. The market has moved past winter and turned its attention to robust production as well as end of winter natural gas storage forecasts. As of this morning, natural gas storage i...

February 1, 2018

With the majority of the Artic cold behind us (some fear remains for February, but latest models have shifted warmer), markets have been reinvigorated by recent speculation that sees oil climbing well beyond previous 2018 forecasts. Just in the past few weeks, 2018 crude forecasts went from $57 dollars to $62 to now $75 over the next three months and $82....

January 22, 2018

The price action experienced in natural gas markets since November has been substantial. The most extreme example of this time of volatility is the the February futures contract which we have seen trade as high as $3.31 and as low as $2.56 over the past three months, a $.75/MMbtu spread or 23%.

Since then, a combination of sustained cold weather and lacklu...

January 5, 2018

Over the past few weeks natural gas has both plummeted and then reversed its course pushing the 12 month strip as low as $2.614, a 2.5 year low, before a sustained cold snap took hold pushing the strip back up to $2.878. During this time of volatility the back end of the curve also lost value, but has since normalized to pre-winter price levels. All power...

December 21, 2017

The sentiment across both power and natural gas markets is unusually bearish for this time of year. The main culprit is a combination of an increase in natural gas production and normal weather which has set the table for an ample amount of natural gas to be available. Right now, natural gas underground storage is projected to end the heating season above...

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