Per this week’s Energy Market Update, I have provided some in-depth energy buying strategies in the current volatile market. Briefly, a month ago NYMEX futures broke out of their range and exceeded $3.60 per MMBtu for the first time in four months. A month later prompt month gas futures are $4.20 for the first time since July 2011. Why, you ask? The primary reason: March was COLD. Heating demand depleted storage inventories to levels not seen since the last time gas was over $4.10. But the long-term picture is not as grim. Gas futures for 2014 are up significantly less than the near-term, and 2015 and 2016 are down. The bottom line is that the rally is being driven by near-term fundamentals while long –term prices have stabilized, thanks to shale reserves resulting in a much flatter forward curve.
The details are in the numbers below
Prices as of 4/12/13 Change since 3/7/13
Prompt month natural gas 4.22 +0.64
12-Month Strip 4.37 +0.52
Calendar 2014 4.26 +0.15
Calendar 2015 4.27 -0.03
Calendar 2016 4.36 -0.09
($ per MMBtu)
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