WEATHER: 6-10 DAY AND 8-14 DAY OUTLOOK
An active pattern continues this week as weather systems track across the US with showers, thunderstorms, and comfortable highs of 60s to 80s for light demand besides the Southwest, Texas, the South, and Florida, where a hot ridge will result in highs of 90s to locally 100s for regionally strong demand.
EIA: WEEKLY GAS STORAGE
PJM ADHUB 2023 ELECTRICITY MARKET MOVEMENT
The electricity market continues to fall in the short term as we achieve milder temperatures and strong storage injections. We are seeing higher storage and less demand than average, though the drop-off in production is worrying. We had been producing nearly 103 Bcf a day, but last week’s output dropped to 101.7.
The increase in electricity demand later this summer brought on by El Nino will affect the market and be aided by reduced production through the summer. Pricing has been comparatively great for our clients compared to last year, with the NYMEX below $2.50, but natural gas producers have a minimum they need the market at to make a profit, and we are beyond or approaching that mark.
Natural gas producers have shut down 27 dry gas rigs in the last two weeks
WHY ARE ENERGY PRICES DECREASING?
The three main factors for the decline in energy prices this year have been:
- The fire at the Freeport LNG facility halted approximately 2.3 Bcf day from export and kept that gas in the domestic market.
- The increase in production to a 100+ bcf a day level.
- The 4th warmest winter on Earth in recorded history, leading to a reduction in demand.
To have a similar market decline next winter we would have to have something similar happen next winter and none of three factors can be counted on to occur again.
PJM BGE HUB FORWARD POWER PRICING
PJM AD HUB FORWARD POWER PRICING
