NYMEX Tumbles

NYMEX Tumbles

One Minute Energy Update (April 24, 2024)

NYMEX Natural Gas Market Analysis: Today’s NYMEX natural gas prices showed significant volatility with an opening price at $1.83/MMBtu, reaching a high of $1.84/MMBtu, and falling to a low of $1.71/MMBtu, currently stabilizing at $1.73/MMBtu. Compared to last week, prices are down by $0.05/MMBtu and down $0.50/MMBtu lower than the same period last year. Current prices are slightly above the short-term moving averages: 50-day ($1.74), 20-day ($1.78), and 9-day ($1.75), indicating potential support for price stabilization despite today's downturn.

Price Projections: NYMEX calendar year estimates for future prices are $2.58/MMBtu for 2024, $3.54/MMBtu for 2025, and $3.97/MMBtu for 2026, suggesting an upward trend in the coming years. Historical monthly averages further underscore current price anomalies with 2023 at $2.73/MMBtu, sharply contrasting with 2022’s $6.64/MMBtu and 2021’s $3.84/MMBtu.

Market Technicals: Key technical levels to watch are resistance starting at $1.82/MMBtu and $1.91/MMBtu, with support levels at $1.76/MMBtu and $1.70/MMBtu. The pivot point rests at $1.80/MMBtu, indicating crucial levels for trader reactions.

Regional Basis and Indexes:

  • PG&E CG Basis: Reported an uptick, reflecting a tightened supply situation in the region.

  • SoCal CG Basis: Showed mixed results with day gains but monthly losses, potentially due to regional demand fluctuations.

  • SoCal Border: This index remains relatively stable, suggesting consistent supply-demand dynamics.

Supply and Demand Dynamics: Estimated daily supply stands at 105.2Bcf, closely aligned with the 7-day average. Production is robust at 100.65Bcf, supporting a high demand of 99.8Bcf. The rig count reflects a growing preference for oil exploration over natural gas, with oil rigs up by 5 to 511 and natural gas rigs down by 3 to 106.

Storage and LNG Movements: The latest storage projection anticipates an injection of 78Bcf. Current storage levels are significantly higher than historical averages, providing a cushion for potential demand spikes. LNG exports maintain strength at 10.9Bcf, supported by steady demand from Mexico and balancing Canadian imports.

Weather Influence and Crude Oil Prices: Weather forecasts remain bullish for the near term, with cooler temperatures potentially boosting heating demand. Crude oil prices are currently on the rise at $83.37 per barrel, with forward estimates indicating a gradual decline over the next two years.

California Energy Sector: CAISO spot prices hover around $20 per MWh.

**THE BOTTOM LINE **– Opportunities for both NYMEX remain. SoCal CG Basis is a decent buy. PG&E CG has room to fall.