NATURAL GAS: NYMEX CALENDAR STRIPS
The cost of Natural Gas continues to drop over the 12 months, and injection season is just around the corner on April 1st. We have seen a trend in the last few years where the current year is priced lower than the following years. So, looking at Natural Gas and Electricity, we see 2024 well below the following year, with 2025 beginning to draw closer to the current year.
ALL ABOUT THE NYMEX TWELVE-MONTH STRIP
- The NYMEX Twelve Month Strip is the average of the upcoming 12 months of closing Henry Hub natural gas futures prices as reported on CME/NYMEX.
- A futures strip is the buying or selling of futures contracts in sequential delivery months traded as a single transaction.
- The NYMEX Twelve Month Strip can lock in a specific price for natural gas futures for a year with 12 monthly contracts connected into a strip.
- The average price of these 12 contracts is the particular price that traders can transact at, indicating the direction of natural gas prices.
- The price of the NYMEX Twelve Month Strip can show the average cost of the next twelve months’ worth of futures.
- The NYMEX Twelve Month Strip is also used to understand the direction of natural gas prices and to lock in a specific price for natural gas futures for a year.
ELECTRICITY: FORWARD POWER PRICING
Electricity did spike up to $49.00 in the ADHUB and $58.00 in the BGE HUB, but just as quickly came back down to $46.00 in the ADUB and $55.00 in the BGE Hub. With Natural Gas dropping below $2.00, that should continue to lower electricity just a bit. Colder weather over the next 10 days may bring pricing up for a short time, but that should be temporary.
EIA: NATURAL GAS STORAGE REPORT
The warmer weather returned after two hefty withdrawals in back-to-back weeks, and the withdrawal was below 100 Bcf again (-75 Bcf). This keeps the storage reports on pace to show high storage and low demand, which has helped keep pricing low and this last week, the prompt month on the NYMEX dropped below $2.00.
WEATHER: US WEATHER FORECAST
Get ready for some mixed weather across the US! Here’s what you can expect:
Monday to Wednesday: Hold onto your hats because a strong storm is approaching the East Coast, bringing heavy rain and snow. But don’t let that get you down because temperatures will be pretty comfortable for most of the country. Up north, expect highs in the 30s to 50s, with some spots dipping into the 20s. It will be mild and pleasant down South, with highs ranging from the upper 40s to the 70s.
Friday to Saturday: Colder air will cool things down in the Midwest and Northeast. Highs will be in the teens to 30s, so bundle up if you’re in these areas!
Overall: National demand for weather-related stuff will be light until Friday, but it’ll pick up to moderate to high levels over the weekend. So, make sure you’re prepared for whatever Mother Nature throws your way!
Stay safe and enjoy the weather, folks!
WHEN IS THE BEST TIME TO BUY NATURAL GAS? WHEN IS THE BEST TIME TO BUY ELECTRICITY?
In the past, customers were always recommended to buy their energy in shoulder months like April and May or October and November. But, in the last ten years, you can see that NOW is the best time to buy energy. Gas was best bought in January – March in six of the previous ten years, and electricity was purchased during the same time in seven of the last ten. BUY NOW.
