WEATHER: NEAR NORMAL TEMPERATURES THROUGH MID-MARCH
HAVE WE HIT THE BOTTOM OF THE NATURAL GAS MARKET?
NATURAL GAS MARKET PRICES CREEP HIGHER DESPITE GOOD STORAGE NUMBERS.
- The storage withdrawal last week was almost half what it was last year and is expected to be below that number again this week, but despite that, the market is beginning to cycle upwards..
- Freeport has reopened two of the three LNG processing trains that have been closed down since the explosion at the LNG facility last June. When it fully reopens, this will take almost 2.5 Bcf a day out of domestic storage for export.
- The cold weather forecast for mid-late March has eased up, which may mean less demand and a cap on the upward swing in pricing.
EIA: NATURAL GAS STORAGE REPORT
- We may have reached the bottom of the natural gas market for now. However, after dropping close to $2.20 last week, the market has climbed back up to $2.60 in the prompt month (April), and future months have settled above $3.00, with next winter near $4.00.
- The Freeport LNG facility is ramping up production and should be online soon. Freeport has been offline since an explosion at the facility on June 8, 2022. However, 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. When fully operational, Freeport will export roughly 2-2.5 Bcf a day.
- Producers may consider 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.
Electricity: PJM BGE HUB FORWARD POWER PRICING
Electricity: PJM AD HUB PRICING 2023
Electricity, which usually runs parallel to Natural Gas in market movement, has increased by roughly $5.00 MWh in the past week, in line with the increase in natural gas pricing. Power pricing is still well below what it was just six months ago
