NATURAL GAS: EIA:NATURAL GAS STORAGE
Last week was the first storage report in over a month with a higher injection than projected. Producers are bringing some assets online to prepare for a top 10 hot summer, and this production increase will help keep downward pressure on pricing.
ELECTRICITY GENERATION SOURCES THE LAST TEN YEARS
This year, we anticipate a continued growth in electricity demand, with the largest increase in contribution to electricity generation coming from renewables. While nuclear and coal generation are expected to remain stable, Natural Gas, currently the largest generation source, is projected to grow slightly due to its low cost.
PJM AD HUB ELECTRICITY VS HENRY HUB PRICES
NATURAL GAS PRODUCTION
NATURAL GAS ELECTRIC POWER USAGE
Oil prices remain high, above $85.00, prompting increased production of associated natural gas. Furthermore, OPEC’s recent announcement to maintain production cuts until the end of this year could lead to a surge in US drillers’ production as they strive to secure a larger market share.
The Golden Pass LNG facility has been delayed until late 2025 due to the contractor, Zachry Holdings, declaring bankruptcy. This delay will force downward pressure on pricing.
ANNOTATED PROMPT MONTH PRICING WITH NOTABLE EVENTS
WEATHER: 6-10 DAY AND 8-14 DAY OUTLOOK
Warm Temperatures Across Most Regions
The natural gas market may see favorable pricing this week due to lower demand throughout the Midwest and the Eastern Seaboard.
The majority of the United States will experience above-normal temperatures over the next several days, with high temperatures ranging from:
- Upper 70s and 80s in the Midwest and Northeast regions
- Upper 80s and 90s across most other parts of the country
Exceptions and Regional Variations
- Locally hotter temperatures, reaching the 100s, are expected in California and Texas
- The Northwest region will remain cooler, with highs in the mid-50s to 60s, accompanied by heavy rainfall
Pattern Change Late in the Week
- A hot upper-level ridge will build over the western half of the US late in the week, further increasing temperatures in those areas
- Weather systems will cool the eastern half of the US, with high temperatures ranging from the 60s to 80s
Key Takeaways
- Widespread warmth across most of the country
- Hottest conditions in the Southwest and parts of California/Texas
- Cooler and wetter weather in the Northwest
- Pattern shift late in the week, with increasing heat in the West and cooler conditions in the East
