NATURAL GAS HEADLINES:
As expected, the market reacted strongly to last Thursday’s two-week storage report. However, the news was good for those looking to finalize their energy agreements. The final total for the two weeks was a +60 Bcf INJECTION, which sent the gas market tumbling and brought the prompt month below $3.00. The Henry Hub is now quoting December, March, April, May, and June below $3.00.
Due to the mild fall, demand has recently fallen in almost all sectors. Natural gas demand is lower in residential, commercial, industrial, and power burn. This could also be partly due to a possible drop in economic production, as job numbers were down significantly last month from September. However, the market did begin to turn up slightly at the end of last week.
EIA: NATURAL GAS WEEKLY STORAGE REPORT
As projected, natural gas prices have fallen in the last week, with prompt-month pricing falling almost below $3.00. Since the start of November, November natural gas prices have dropped $0.66, from $3.62 to $2.96 on Friday. This drop coincided with a change in the weather forecast, which called for milder temperatures than initially forecast.
FORWARD POWER PRICES
Electricity pricing in both the BGE HUB and the AD HUB have seen near pricing fall dramatically while future pricing climbs steadily. This may very well be a sign that the market is solidifying its prediction that this winter will be mild and see lower demand, similar to last year.
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.
NATURAL GAS PRICING FOR THE NEXT EIGHT MONTHS
WEATHER FORECAST: 6-10 DAY AND 8-14 DAY OUTLOOK
Get ready for a mild week in much of the US! From Monday to Friday, temperatures will be higher than usual, ranging from the upper 40s to 60s in the northern US and a pleasant 60s to 80s in the southern US. The weather will take a turn over the weekend to Tuesday, bringing cooler conditions, rain, and snow to the Midwest and Northeast. Expect temperatures in the 40s and 50s during the day and 20s-30s at night, which might lead to a slight increase in seasonal demand.
However, most of the country will still enjoy nice weather, with highs ranging from the 50s to the 70s. In summary, there will be light to very light demand until Friday, followed by a moderate to seasonal increase from Saturday to Tuesday.
