Weather Forecast: Below Average Temperature Outlook
Hurricane Ian directly hit Fort Myers and Sanibel Island, Florida, late last week, causing devastating damage to property and infrastructure. The storm knocked out power to more than 2 million Florida residents.
Weather in the Midwest and East is mainly seasonal, with some frost warnings in the midwest this week. Modest heating demand is expected in these regions.
Monthly Weather Map for October:
Natural Gas Storage Report
The Energy Information Administration (EIA) reported an injection of 103 Bcf into underground storage for the week ending September 23. Inventories are 2,977 Bcf, which is 6% less than the same period last year and 9% lower than the 5-year average.
Natural gas production continues to climb, hitting a record of 100.1 Bcf/day on Monday, October 3.
Natural Gas
Prompt month NYMEX natural gas settled at $6.47/MMbtu on Monday, October 3.
Prompt month NYMEX natural gas recovered somewhat, trading at $6.65/MMbtu in morning trading last Tuesday.
Natural gas production continues to climb, hitting a record of 100.1 Bcf/day on Monday, October 3 Storage estimates for the end of October are edging up to the five-year average, adding additional downside pressure to the natural gas market in the near term. U.S. natural gas futures concluded their sixth consecutive week of declines for the first time since January of 2015.
The Mid-Atlantic Region’s forward power prices continue to soften in the shoulder months, along with natural gas prices, as lower cooling demand, higher production, and more supply from LNG facilities due to maintenance continue to impact prices negatively.
U.S. natural gas futures concluded their sixth consecutive week of declines for the first time since January of 2015. Forward power prices in the Mid-Atlantic Region were -1% lower over the past week for 2023, but pretty much unchanged beyond that for the 2024-2027 terms, despite falling natural gas prices. Compared to the all-time highs, forward prices for the entire term are -8% lower than the highs on average, with the front-end of the price curve -14% lower and the back-end, -7% lower. Year-over-year the forward terms are still +56% higher, on average, for the entire term.
The natural moderation in temperatures coming-out of the summer peak demand has index prices continuing to drop. The final day-ahead index settlement prices for September in West Hub averaged $78.14/MWh, or -20% lower than last month’s average but still +73% higher than the September average from a year ago, while those same prices in East Hub were $79.63, which is -24% and +104% respectively.
