]October 14, 2024
Industry News
Capacity Auction Update
PJM announced it will support a six-month delay of the 2026/2027 capacity auction, initially scheduled for December 2024.
Weather Outlook
6-10 Day and 8-14 Day Forecast
A warmer front is moving across the country, but average temperatures are dipping, reducing demand for now. Expect natural gas demand to drop slightly as we enter a shoulder month. Fewer people will be using air conditioning or turning on heat.
Natural Gas Demand Outlook
Natural Gas Storage Report
The current prompt month pricing has fallen below $2.60, according to the expectation of lower demand. We saw demand drop after Hurricane Milton made landfall last week. While more than 4 million people lost power, affecting demand, power is quickly restored. This hurricane caused a sell-off, but look for prices to inch upward as demand is restored.
Market Dynamics
AD Hub Electricity vs Henry Hub Prices
PJM AD Hub Historical Forward Power Curves
Supply and Demand Factors
LNG Demand
- Europe’s natural gas stockpiles are almost 90% full and may have less demand than expected. Lower LNG exports would mean more domestic supply, keeping the market lower.
- LNG exports are currently near 12.5 Bcf/d.
Weather Impact
The warmer weather trend is expected to continue, potentially leading to:
- Reduced residential and commercial demand for heating
- Lower power sector consumption
Looking Ahead
While demand may be lower in the short term due to warmer weather, there are expectations of increased demand as winter approaches. The National Gas Supply Association predicts that a colder-than-normal winter will increase residential and commercial demand by 14% compared to last winter.
