EIA: WEEKLY NATURAL GAS STORAGE
The last two natural gas storage reports have shown a more robust injection than the five-year average, which is helping to keep the price of Natural Gas lower as mild weather has kept heat demand down. Projections of a mild winter due to a strong El Nino are also holding back gas prices.
We are projected to end the year with 3.81 trillion cubic feet of natural gas in storage. Higher than last year and the 5-year average. This storage number helps to keep down pricing in the near term. Future years do not look so favorable, with January 2025 at $4.59 and 2026 at $5.10.
The global oil and gas market has been very volatile due to the wars in Ukraine and Israel. Egypt announced the imports of oil and natural gas into Egypt had been reduced because of the war, and natural gas and oil both saw volatile prices globally, with higher prices in Europe.
NYMEX 12-MONTH ROLLING STRIP
After picking up steam, pricing for the prompt month gas market should fall back again. The original increase in price was caused by a weather forecast that called for more Heating Degree Days and a colder forecast, especially in the Great Lakes and Northeast. That forecast has already switched back to warmer weather, thereby reducing projected demand.
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.
US WEATHER: 6-10 DAY AND 8-14 DAY OUTLOOK
Until Thursday, expect above-normal temperatures in the southern and eastern parts of the US, with highs ranging from the upper 50s to the 80s. In the Northwest, Mountain West, and the far northern US, milder conditions are expected as weather systems move through, bringing showers and highs in the upper 30s to 50s.
Starting Friday and lasting through Sunday, a cool spell will sweep across the northern and central US, bringing highs in the 30s and 40s, and lows in the teens to 30s. This will lead to a near-seasonal increase in national energy demand.
ELECTRICITY: FORWARD POWER PRICES
PJM BGE FORWARD POWER PRICES
PJM ADHUB FORWARD POWER PRICES
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.
