NATURAL GAS PRICING IS STILL LOW, BUT WARNING SIGNS ARE ON THE HORIZON
Natural Gas: SUPPLY IS UP, BUT SO IS DEMAND.
- In 2023, Natural gas production in 2023 has been near or above 100 Bcf/d, all-time highs. However, the demand from industrial users and the market for power burn are much higher than average.
- Freeport is now ramping up exports. They have offloaded existing inventories and accepted new shipments of natural gas via pipeline but are still waiting for regulators to approve their processing trains to produce LNG for export.
- After three good storage reports, we are over 30% above last year’s gas inventories and 21% above the five-year average.
NATURAL GAS INDUSTRIAL DEMAND
- Natural Gas Storage is now 32% above last year and 21.5% over the five-year average. However, there are warning signs that this surplus may be consumed relatively quickly. Power Burn demand and Industrial Demand are near the top of the five-year average and nearing record levels, while production has dipped back below 100 Bcf/d.
- The Freeport LNG facility is ramping up production and should be online soon. Two of the three trains (the trains are the different parts of the LNG processing line) are now operating, and the third train is just waiting for final approval to restart operations. Freeport will export roughly 2-2.5 Bcf a day when it is fully operational.
NATURAL GAS POWER BURN DEMAND
EIA: NATURAL GAS STORAGE REPORT
- Three good storage reports in a row have helped tamp down the market, with the April prompt month back down near $2.60 after approaching $3.00 early last week.
- Producers may look at cutting production back from the near-record level, as they have been at around 102 Bcf/d. Freeport is also expected to get approval for LNG processing and will begin exporting new inventory, likely by the end of April or May. This will mean between 2.0 and 2.6 Bcf a day will move from domestic supply to export.
WEATHER: COOLER TEMPS INTO EARLY APRIL EXCEPT IN THE SOUTHEAST
This Week’s National Weather Outlook: Most of the U.S. will see cool – if not colder – weather, driving demand in the first part of the week.
Later in the week, temperatures will rise, and demand will lessen. The weekend will bring rain, snow, and cooler temperatures over much of the West and Plain states.
This system will spread south and eastward for the weekend, leading to a more robust national demand.
PJM BGE HUB FORWARD POWER PRICING
PJM AD HUB PRICING 2023
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