THE NATION IS STILL IN THE GRIPS OF A HEAT WAVE
HEAT CONTINUES TO PUSH THE MARKET UPWARDS
2022 has seemed like one heat wave after another, but so far, it only ranks as the sixth hottest year on record, with 2021 being the hottest year.
If the heat waves continue, we could see 2022 become the hottest summer on record. FYI, the ten hottest years have all been in the last ten years.
WITHOUT RELIEF FROM HEAT, WE COULD BE BACK AT $9.00
- Near record heat increased demand and strain electric grids across the country as the market continued to climb. Without relief from the heat or increased natural gas production, we could return to $9.00 for gas.
- The return to $9 pricing is despite the EIA projecting $5.00-$6.00 average pricing for the second half of 2022 due to the shutdown of the Freeport LNG facility.
- A significant issue has been a gas/oil field services and supplies shortage. Pipeline and machinery are in short supply to even start drilling.
NATURAL GAS STORAGE REPORT
- A new wrinkle in the quest to increase gas production has been the oil and gas drilling machinery and parts shortage. The pipeline has been in short supply due to supply chain issues, and Halliburton, the largest provider of drilling services equipment, predicts it will remain in short supply for the next few months.
- The relentless heat waves have pushed cooling demand across the country much higher than average. This heat wave pushed the NYMEX above $8.00 to $8.23 Sunday night, up from $5.53 19 days ago.
- The closing of the Freeport LNG facility has helped alleviate our natural gas shortage for next winter, but that facility may be partially operational by mid-October. Once that facility is back up and running, it will not lack LNG export demand.
Market Snapshot: Forward Power Pricing
PJM BGE JULY 12TH
PJM BGE JULY 19TH
PJM ADHUB JULY 12TH
PJM ADHUB JULY 19TH
