Natural Gas Headlines:
WORKING NATURAL GAS STOCKS POST SECOND-LARGEST WEEKLY NET INCREASE ON RECORD
- Net injections into working natural gas storage totaled 129 billion cubic feet (Bcf) for the week ending September 30, 2022, 48% more than the five-year average (2017–21) for the week of 87 Bcf. Working gas reached 3,106 Bcf, as of last Friday, exceeding the 3,000 Bcf mark for the first time since last January—about four weeks later than normal.
- This week’s report marks the second-largest weekly net increase in the history of the Weekly Natural Gas Storage Report (WNGSR) dating back to 1993. The largest weekly net increase was 132 Bcf, for the week ending May 29, 2015.
SUPPLIER STORY: AEP RECENT NATURAL GAS PRICING
On Monday, November 7, markets are rallying to start the week following a sizeable weather-driven demand gain in weekend weather model runs for the 6–15-day period. As a result, in December 2022, natural gas is up $0.578/MMBtu to $6.978/MMBtu, and in December, peak power at AEP – Dayton Hub is up $5.00/MWh to $84.25/MWh.
On Friday, November 4, another flip in the weather models saw natural gas rise, with the December 2022 contract up $0.425/MMBtu to $6.400/MMBtu. Despite continued softness in power due to the unseasonable weather, peak power at AEP – Dayton Hub moved along with natural gas starting next week at $9.00/MWh
Natural Gas Pricing: Henry Hub
WHAT IS HENRY HUB?
Henry Hub is a natural gas pipeline located in Erath, Louisiana, that serves as the official delivery location for futures contracts on the New York Mercantile Exchange (NYMEX).
WEATHER HEADLINES
- La Niña conditions expected to continue
- Drought conditions expected to persist through winter
- Uncertainty in winter blocking risks
- NRG Reports that they expect this winter to be the 17th Warmest since 1950
- Highest confidence forecast from the southwest to the southeast due to drought conditions, pattern matches, & climate models
- Cold air intrusions dependent on upper-level blocking
- Primary Forecast Drivers: La Niña Base State, continued drought
La Niña
- In general, La Niña winters are colder from a national demand perspective and El Niño winters are warmer
- In La Niña, a more active, variable Polar Jet Stream brings periodic cold and wet conditions to the Pac NW and northern US, while the inactive subtropical jet keeps the southern tier dry and warm
- El Niño features warmer than normal waters in the equatorial Pacific, and La Niña features cooler than normal waters in the equatorial Pacific
