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WEATHER: 6-10 DAY AND 8-14 DAY OUTLOOK

US Weather map

From December 11 to 17, weather systems will move across the western and eastern parts of the United States, bringing rain and snow. The temperatures will be relatively mild, with highs mostly ranging from the 30s to the 50s.

In the southern US, temperatures will be comfortable, reaching highs of 50s to 70s, and locally even getting into the 80s. The southern region will be dry early in the week, but there will be an increase in areas of showers later in the week. The national energy demand will be light over the next seven days.

EIA: WEEKLY GAS STORAGE

EIA Natural gas storage report

Most of this comes from record Natural Gas production at levels over 105 Bcf a year. We also see record oil production, which has increased our associated natural gas production, a by-product of oil drilling. The other major factor has been the very mild weather we have enjoyed nationwide and forecasts of continued mild winter weather this season.

The only thing that seems to be keeping prices from falling even further has been the geopolitical worries regarding the Russia-Ukraine and Israel-Hamas conflicts.

The US, already the world’s largest exporter of liquid natural gas, has also seen an uptick in exports over the last few weeks. This is a great time to get your energy agreements in order.

FORWARD POWER PRICING

FORWARD POWER PRICING BGE HUB

Not only has gas taken a sharp downward turn, but electricity for the coming year has also fallen dramatically. The BGE and Ad Hub have lost almost $5.00 per MWh each in the last two months. The downward trend has also pulled 2025-2027 downward, with 2025 beginning to fall even more sharply than 2026 and 2027.

FORWARD POWER PRICING AD HUB

WHAT IS FORWARD POWER PRICING?

Forward power pricing is a financial mechanism used in the energy industry, particularly in the electricity market. It involves the pricing and trading of electricity for future delivery at a predetermined price. This mechanism allows electricity producers, consumers, and traders to hedge against price fluctuations in the electricity market and manage their risk exposure.

NYMEX 12 MONTH PRICING STRIP

Despite an abnormally large withdrawal for this time of the year (-117 Bcf reported for December 1), the NYMEX Gas market has continued to tumble, falling to $2.44 for the prompt month over the weekend. Every month up until November 2024 is now below $3.00. Now is an excellent time to set up a Natural Gas agreement.

NYMEX 12 MONTH PRICING STRIP

ALL ABOUT THE NYMEX TWELVE-MONTH STRIP

  • The NYMEX Twelve Month Strip is the average of the upcoming 12 months of closing Henry Hub natural gas futures prices as reported on CME/NYMEX.
  • A futures strip is the buying or selling of futures contracts in sequential delivery months traded as a single transaction.
  • The NYMEX Twelve Month Strip can lock in a specific price for natural gas futures for a year with 12 monthly contracts connected into a strip.
  • The average price of these 12 contracts is the particular price that traders can transact at, indicating the direction of natural gas prices.
  • The price of the NYMEX Twelve Month Strip can show the average cost of the next twelve months’ worth of futures.
  • The NYMEX Twelve Month Strip is also used to understand the direction of natural gas prices and to lock in a specific price for natural gas futures for a year.