NATURAL GAS IS STILL LOW, BUT WARNING SIGNS ARE ON THE HORIZON
SUPPLY IS UP, BUT SO IS DEMAND.
- After a short uptick in gas pricing in mid-March, gas is cycling downwards again, with the 12-year strip now just over $3.00
- FirstEnergy announced the results of their last auction for the utility rate and announced that the final utility rate for June 2023 through May 2024 would be 10.2 cents per kWh, almost twice what it had been the previous year.
FirstEnergy Auction Results Almost Double
FirstEnergy announced the results of its final three auctions last week. The final auction had five winning bidders and settled at $83.75.
Along with the October 2022 auction at 122.20 and January’s auction at $99.77, the final rate for June 2023 through May 2024 will be $10.2 per kWh. Almost double what it had been.
LNG EXPORTS
Inventories and accepted new shipments of natural gas via pipeline but are still waiting for regulators to approve their processing trains to produce LNG for export.
EIA NATURAL GAS STORAGE REPORT
- With the Freeport LNG facility waiting on final approval for processing LNG, it is worth noting that the facility, which closed after an explosion last June 8th, took roughly 2.3 Bcf a day off the export market. Multiply that by seven days which is 16.1 Bcf a week that was not exported. Multiply that by the roughly 42 weeks since the explosion, which is 676 billion cubic feet still in storage.
- Without that extra gas, we would have a little more than 175 fewer Bcf than last year and almost 320 billion cubic feet less than the five-year average. That would also mean significantly higher gas and electricity pricing than we have now.
Future Electricity Pricing
Future electricity pricing is now deviating from the norm. Usually, the closest year will be the highest price, with future years lower in cost.
But now, with the mild winter and lower gas prices, we see the closest year, 2024, being priced quite a bit lower. For example, in the BGE HUB, pricing for 2024 is more than $5.00 less per MWh than in 2027.
PJM BGE HUB FORWARD POWER PRICING
PJM ADHUB HUB FORWARD POWER PRICING
COOLER TEMPS INTO EARLY APRIL EXCEPT IN THE SOUTHEAST
An active pattern this week as a series of weather systems sweep across the US with rain, snow, and below-average temperatures. Overall, moderate to strong vs. average demand for the next four days, then increasing demand towards the end of the week.
