NYMEX NATURAL GAS CALENDAR STRIPS
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.
6-10 DAY AND 8-14 DAY OUTLOOK
The forecast for late June/early July turned slightly cooler, resulting in a slight price drop for natural gas and electricity. After reaching $3.15 two weeks ago, July Natural Gas has sunk to $2.68. However, we will be switching to August pricing as the prompt month is just a day or two, and pricing for August sits just above $2.80.
NATURAL GAS STORAGE
NATURAL GAS STORAGE WITH PROJECTION
Last week’s injection of +71 was well below last year’s five-year average. The increase in LNG exports, higher demand, and, most of all, the cutback in production are making our gas surplus smaller and smaller. The surplus could be gone by the end of this coming winter. The following three projections are expected to be +75, +69 and +55. That is 38 Bcf below the five-year average over the next three weeks.
PJM AD HUB FORWARD POWER CURVE
NATURAL GAS PRODUCTION
Crude Oil Pricing
The price of Brent Crude oil is back above $84.00. This will keep oil producers happy and should keep their production up. More associated natural gas production, a byproduct of oil drilling, should lower natural gas prices.
CAPACITY AUCTION
The next capacity auction, the PJM Base Residual Auction, began on June 12th and closed on June 18th, with results slated to be posted on June 25th. This auction will determine capacity prices for parts of the PJM grid for the 2025/2026 year. The auction results will be applied in June 2025 and last through May 2026. Capacity for 2024/2025 is currently $28.92, one of the lowest capacity prices in recent years. This current auction is projected to be higher.
