US WEATHER: 6-10 DAY AND 8-14 DAY OUTLOOK
For the next 6-10 days, we will see warmer weather than average in the North and cooler than typical weather than average in the South.
This could temporarily lower demand as cooler temperatures in the South will lead to less AC usage, and warmer temperatures in the North will help lower any lingering heat demand.
As a result, look for stronger than normal storage reports in the next 2-3 weeks.
El NINO IS COMING
As the La Nina weather system switches to El Nino, you can expect warmer, wetter weather starting this month and increasing in intensity as the summer rolls on.
The possible good news is that El Nino typically results in milder winters, though it will be tough to beat this past winter for mild temps.
WHAT IS EL NINO ANYWAY?
El Niño is a climate phenomenon that happens in the tropical Pacific Ocean. Typically, trade winds blow from east to west, pushing warm water toward the western Pacific. This process creates cold, nutrient-rich waters along the west coast of South America.
During El Niño, the trade winds weaken, causing warm water to flow back towards the central and eastern Pacific. This leads to warmer sea surface temperatures in those regions.
Want to learn more? Check out TPI’s deep dive explainer about El Nino >>
EIA: Natural Gas Storage Report
FORWARD POWER PRICING
The increase in electricity demand later this summer brought on by El Nino will affect the market and be aided by a reduction in production through the summer. Our clients ‘ pricing has been comparatively low compared to last year, with the NYMEX below $2.50.
Still, natural gas producers have a minimum they need the market to be at to make a profit, and we are likely below or approaching that mark. Natural gas producers have shut down 27 dry gas rigs in the last two weeks
