WEATHER: 6-10 DAY AND 8-14 DAY OUTLOOK
Forecasts for scorching weather in late June and a severe Heat Dome covering the Southwest sent prices sharply upward last week. Pricing for July Natural Gas went from $2.53 on Tuesday the 6th to $2.97 on Sunday.
EIA: NATURAL GAS STORAGE
Last week’s storage report was still just above the expected range (+97 Bcf), but investors looked past that to the higher demand later this month. Also, it has been six weeks since the Natural Gas Storage report came in with an injection below the five-year average. Our gas surplus is still very plentiful, but it is slowly being whittled away, and the smaller our surplus gets, the higher prices will trend.
OPEC TO MAINTAIN PRODUCTION CUTS
OPEC’s announcement last Sunday to maintain the production cuts they implemented last year until the end of this year is a crucial development. This decision is likely to encourage U.S. drillers to increase production, aiming to secure a larger market share. The potential increase in oil production could help sustain high oil prices, which in turn could impact the production of associated natural gas, a byproduct of oil drilling.
PJM AD HUB ELECTRICITY VS HENRY HUB PRICES
The significance of the next capacity auction, the PJM Base Residual Auction, cannot be overstated. It is set to open on June 12 and close on June 18, with results expected to be posted on June 25. This auction will determine capacity prices for parts of the PJM grid for the 2025/2026 year.
The auction results, to be applied in June of 2025 and last through May of 2026, will have a lasting impact on the market.
For reference, the current capacity for 2024/2025 is $28.92, one of the lowest capacity prices in recent years.
AD HUB FORWARD POWER CURVES
