TPI Market Snapshot header
market snapshot header

HEAT PERSISTS THROUGH TEXAS AND THE PLAINS STATES

weather map
Natural Gas:

THE MARKET HAS DROPPED ALMOST $4.00 IN THE LAST MONTH

FREEPORT AND EASING WEATHER EXTREMES

EIA chart
  • From a high of $9.54 on June 8th, when the Freeport facility suffered the explosion, the market has dropped $3.75 in the last month, and electricity pricing is finally catching up.
  • The loss of the exports from the Freeport facility has made almost all of the difference. Last week’s storage report came in at +82 Bcf. Take away the ~2.0 Bcf/d that WAS being exported, and the injection would have been just +68 for the week. This is below last year’s injection and the 5-year average.
  • Electricity pricing has also dropped ~10% in the last week in the BGE and AdHUB.
  • Henry Hub is a natural gas pipeline located in Erath, Louisiana, that serves as the official delivery location for futures contracts on the New York Mercantile Exchange (NYMEX). 

NATURAL GAS STORAGE REPORT

EIA chart
  • The Natural Gas market has fallen by almost $4.00 in the last month. This downward trend is happening event by event: The Freeport explosion, the announcement that it would be out until late 2022, better than expected storage reports. Still, the market can turn just as quickly. Examples could include repairs to Freeport are completed ahead of schedule, more minor storage reports that could cause these conditions could turn in an instant. So DO NOT WAIT TO ACT ON NATURAL GAS PRICING.
  • Electricity pricing has finally started to catch up to Natural Gas as electricity pricing has dropped roughly $12.00 in the BGE per mWh and $15.00 in the AdHUB.
  • Next spring is still the sweet spot for starting new contracts, with gas futures down to $4.30 in May and capacity costs next June going down from $50 to $34.00 in Ohio and down almost 50% in the BGE.
  • The 2023-2024 capacity auction results were released Tuesday, and capacity came in even lower than last time, with BGE dropping by almost half to $69.95 and the AdHub (including ATSI) dropping from $50.00 to $34.13. The drop is attributed to an increase in nuclear. The .auction featured a surge in cleared nuclear and new gas-fired generation, with a decline in coal-fired energy generation.