TPI Market Snapshot header

THE ENERGY MARKET – BIG REASONS TO BUY NOW:

NATURAL GAS SUPPLY

NATURAL GAS SUPPLY chart - EIA
  • Though production did top 101 Bcf last week, producers are still keeping a tight watch on the price of Natural Gas, which will likely curb production again as the NYMEX has lost almost $0.50 per MMBtu over the last week.
  • The 20% surplus we once enjoyed last year (29% over the five-year average) is now down to 11% and 21% and will likely dwindle to almost nothing by the onset of Winter 2025.
  • We may see demand-supply disruption as Hurricane Bethyl strikes Texas and the Gulf Coast.

LNG DEMAND

chart - LNG Demand
  • LNG Exports are slowly climbing again after Freeport LNG fixed their three trains, and they are now near total capacity.
  • Plaquemines LNG facility will begin production within weeks; Golden Pass is expected to open in 2025.
  • Not including the Mexican NG pipeline, which exports about 6-7 Bcf/d, the U.S. will export upwards of 20 bcf daily by the end of 2030. Right around the corner.

WEATHER DEMAND

  • 2023 set a new record for summer heat, and 2024 is expected to be up there. The following 6-10 days show well above average temps across most of the nation. 
weather map - usa national map

6-10 DAY AND 8-14 DAY OUTLOOK

The natural gas demand for this week is expected to be HIGH due to intense high pressure and hot temperatures across much of the southern and eastern United States. Specifically:

  • High pressure will dominate the southern and eastern halves of the US this week, with temperatures reaching the upper 80s to 100s Fahrenheit.
  • Chicago is expected to see highs in the mid-90s today.
  • Most East Coast cities will experience temperatures in the 90s from Tuesday to Thursday.
  • The Northwest and Northern Plains will be cooler exceptions, with highs in the upper 50s to 70s and some lingering showers.
  • Texas will see cooler temperatures from Tuesday to Thursday as tropical rains arrive.

The widespread hot temperatures across populous regions are driving up cooling demand and electricity usage, increasing natural gas consumption for power generation.

It’s worth noting that while demand is high this week, overall natural gas prices remain relatively low compared to last year due to abundant supply. The summer 2024 futures prices at Henry Hub averaged $2.25/MMBtu as of May 1, down 9% from summer 2023 settled prices. However, the current high demand could support prices in the short term.

PJM AD HUB FORWARD POWER CURVE

PJM AD HUB FORWARD POWER CURVE chart

NATURAL GAS PRODUCTION

NATURAL GAS PRODUCTION chart