Happy Pi Day!
MILDER WEATHER SHOULD LEAD TO LOWER DEMAND ACROSS THE COUNTRY
Milder weather is on the way soon. This should lower demand and may even lower Natural Gas prices.
Later this week, a warmer weather pattern will arrive as high-pressure rules vast stretches of the country. Slow-moving mild and wet systems will linger over the Northwest and the South, but with very little subfreezing air anywhere in the U.S., national demand will be light to very towards the end of the week.
HIGH WITHDRAWAL KEEPS PRICES HIGH THIS WEEK
IT COULD HAVE BEEN MUCH WORSE
The market jumped roughly $0.15 on Tuesday when President Biden announced sanctions on Russian oil. Still, the U.S. oil companies had already enacted a de facto oil embargo when they stopped importing Russian oil at the invasion’s outset.
U.S. oil producers are beginning to increase production, but it will take a few months to ramp up because oil producers are wary of creating a glut and also experiencing labor shortages to start the wells.
As a general principle, when oil producers increase drilling, Natural Gas supply also increases due to Associated Production.
PJM ADHUB FORWARD POWER PRICING
PJM BGE FORWARD POWER PRICING
HENRY HUB NATURAL GAS VS PJM ADHUB FORWARD [RICING
Oil could very well hit $300 a barrel at some point as this Russia Ukraine War continues. There is no end in sight, and no reason demand or financing will end for investment.
When Oil prices rise as they have been, that makes all products more expensive, whether because of the cost to transport goods or make goods, this increase often leads to a recession.
As oil increases in price, additional production becomes more attractive to drillers. More oil drilling leads to more Associated Gas Production, a byproduct of drilling for oil. This increase in production and supply is likely months away but could change the Natural Gas market.
