CME/NYMEX Henry Hub gas futures prices are currently struggling to stay above $2.00/MMBtu in the face of milder weather and record high production (closing up slightly at $2.038/MMBtu yesterday February 3, 2016). The market is on edge and at the mercy of daily weather forecast revisions that may signal further downside for prices. At the same time gas demand from power generation could increase in response to lower prices. To help navigate these volatile market conditions, we’ve teamed up with Criterion Research to develop the daily NATGAS Billboard: Natural Gas Outlook report. In today’s blog, we highlight specific features of the report and what they tell us about the market.
As we explained in our Intro Blog about the NATGAS Billboard: Natural Gas Outlook, the report is a daily morning update of our view on the U.S. natural gas market. Recipients of the daily RBN Blog Post email are receiving a copy of the report in a separate email each morning for a week – and can sign up for a trial subscription here. The report – that we developed with Criterion Research including ace gas market forecaster Kyle Cooper - takes the meaningful data points that impact the gas market each day and distills them down to determine the net impact on price. Each morning we take all the latest iterations of the raw fundamental data, (including weather forecasts, pipeline flow data, storage facility postings, weekly electricity demand data, CME/NYMEX price action and the weekly EIA inventory data), and extrapolate the answer – a snapshot price outlook.
Today we’ll get into the specific features of the report and what they tell you about the market.
The flagship feature of the report is the “U.S. Gas Price Billboard” table at the top of Page 1, which puts our price outlook snapshot in the context of historical prices and daily price movements in the futures market. Figure 1 zooms into the Billboard price table from the Feb. 3 edition of the report (For today’s Billboard report click here or to sign up for a free trial subscription click here).
Comments
Thanks for putting this together! One suggestion:
The Win15-16 figure listed int the Futures Pricing table is comprised of the average of the expired contracts in the Nov-Mar window (2.033, 2.206, 2.372, 2.189) and those contracts that are still being traded, in this case only March (2.014). I think that a better metric might be formed by only representing the balance of contracts still trading... easier to contextualize and compare to the forecast for the same term in the Forecast Prices table. To clear up any confusion, you might title the column Win15-16(Bal) once a contract has expired for the term in question.
Regards,
Patrick