Natural Gas:

STORAGE WORRIES FOR NEXT WINTER CONTINUE TO INFLATE MARKET

SOME RELIEF MAY BE ON THE WAY.

Worries about Natural Gas Storage for Winter ‘22-’23 sent the market peaking above $9.00 last week, ever closer to a record high of $15.78 in December 2005 and the highest since 2008. The outlook does not look good, with only three weeks of smaller withdrawals and higher injections out of 17 this year.

  • We are still almost 20% below last winter’s storage levels and more than 16% below the five-year average.
  • The withdrawals and injections so far in 2022 have only three instances where we withdrew less or injected more than the five-year average. However, with exports high, hot summer predicted (more demand), and production not increasing quickly enough to meet demand, we are looking at an even more expensive winter.
  • With gas peaking over $9.00 last week, we see the highest market rates since 2008 when the NYMEX reached $13.00.

STORAGE WORRIES FOR NEXT WINTER CONTINUE TO INFLATE MARKET

NATURAL GAS STORAGE BY WEEK

Over the weekend, while the next 10-11 months increased slightly, the pricing a year out and further began to drop. Whether this is from the confidence that steps to expand drilling will materialize in a year or not, it is best to look at least a year out for better pricing and results. 

CONSTELLATION FORWARD POWER PRICING AD HUB

CONSTELLATION FORWARD POWER PRICING BGE HUB

Weather:

COOLING DEMAND WILL ARRIVE IN THE SOUTHERN AND PLAINS STATES

The warmer weather coming through will reduce heating demand in the North, but cooling demand will increase in the South. Dallas, TX, will be in the ’90s this week and Miami in the mid to high 80’s.

Russia’s War on Ukraine:

The G7 vowed to reduce their reliance on Russian Oil by phasing out or banning Russian oil imports. Since it was not an official outright ban, this did not move the markets much but may grow stricter in the coming weeks. Russia celebrated Victory Day on May 9th, and that may come with a declaration from Vladimir Putin that raises the stakes for further invasions.