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<em>Energy market snapshot for Monday July 17 2023 Natural Gas Electricity Energy News<em>

6-10 DAY AND 8-14 DAY WEATHER OUTLOOK


Weather News: The oppressive heat in the west brought record temperatures in the southwest and central California. The heat will level off, but higher temperatures still extend from the Canadian border to the Mexican border and will become more widespread.

The El Nino to the west of Baja California is bringing warmer temperatures to the ocean surface and warmer weather in the west.

As the weather warms, some suppliers are issuing peak demand warnings.

What are peak demand warnings?

One of the five highest-demand days (during the summer months) when PJM chooses to measure the peak demand—typically during the hour of the day with the highest demand. Your capacity tag will affect your capacity costs and ~30% of your energy rate.

Make any adjustments to reduce usage, such as raising your AC temp, moving a shift to nighttime, etc.

Are you registered for TPI’s peak demand alerts?

EIA: WEEKLY GAS STORAGE

Natural gas pricing has tumbled almost 0.20 cents since Wednesday as production fears ebbed a bit this past week.

Could you take advantage of it now? Gas and oil producers are still cycling the rig count down and intend to cut production to boost the price of natural gas.

NYMEX TWELVE-MONTH 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.

TOTAL NATURAL GAS DEMAND WITH EXPORTS

Forward Power Pricing

Pay attention to the forward power pricing. While 2024 remains low, 2025, 2026, and 2027 are starting to price higher and bunch up around the same price level: $56-$57 a MWh in the BGE Hub and $47 in the AD Hub. In the Ad, we are now even seeing 2025 pricing inch higher than 2026 pricing, which may mean 36-month pricing will start to be less than 24-month pricing, though the lack of a known capacity cost could mean that it stays higher

BGE FORWARD POWER PRICING

AD HUB FORWARD POWER PRICING