Energy Market Outlook – February 21, 2017

Energy News and Market Information for the week of 2/21/2017

Author: Jason Scarbrough

NYMEX Natural Gas Pricing Slammed Today

“Current View of the NYMEX Natural Gas Market”

  • Today the NYMEX natural gas market closed down 9.53% in the front month. It did this while breaking through the technical support that the bulls had built over the last couple of months. However, even the Bulls’ solid technical foundation couldn’t stop this Bearish move.
  • Largest selloff since 2000 – clearly a great deal of financial stops were triggered today – the physical market was selling gas in the mid $3.00 range prior to today’s move. Indicating this move could be more about financials than physical fundamentals.
  • Market seems to be oversold – today was a broad selloff reaching out to the winter of 2018 but slowing down as liquidity dried up in the forward curve. The double bottom formation that was holding right around $2.72/MMBtu for the April contract, couldn’t hold past midday. It opened the door for further weakness that occurred all the way to the close. The continuous chart (the last of the three charts shown) has support from the November lows holding at $2.54/MMBtu. This will be prompt month level to watch in the coming days. All other indicators, technical and fundamental, point to a Bearish market.
  • Gas is very cheap today – not sure if it can hold down here past the March expiration at the end of this week.