Natural Gas

WINTER 22-23 WORRIES CONTINUE TO PRESSURE THE MARKET UPWARDS

NO RELIEF IN SIGHT.

  • Worries about the lack of injections and possible storage shortages for next winter kept the Natural Gas price hovering near $8.00 for the week.
  • Increased LNG exports will make up the bulk of increased demand in 2022, keeping pricing high until next spring.
  • While production is expected to climb 3.8% this year, demand will rise by 4.3%, creating a further imbalance in supply and demand.
  • The seven hottest summers in recorded history have all been in the last seven years, and this summer is projected to be in that top seven.
chart

NATURAL GAS STORAGE REPORT

EIA chart
  • Lack of strong injections and worries about storage levels keep the price of Natural Gas high, affecting the cost of electricity. Prices in the second half of 2022 are expected to average well above $8.00 and will drop significantly until April 2023.
  • Exports of LNG will increase this year with the situation in Europe getting step-by-step closer to sanctions on Russian Oil and Gas. Lithuania just declared that they are severing energy ties with Russia, and Russia also cut off Natural Gas supplies to Finland after they applied for admission to NATO.
  • The latest Capacity Auction for the 2023-2024 year is supposed to happen in early June, though it has been postponed twice already. The new capacity rates of $50.00 are set to start on June 1st.

Natural Gas

PRODUCTION IS INCREASING

EIA chart
  • Exports of LNG will increase this year with the situation in Europe getting step-by-step closer to sanctions on Russian Oil and Gas. Lithuania just declared that they are severing energy ties with Russia, and Russia also cut off Natural Gas supplies to Finland after they applied for admission to NATO.
  • The latest Capacity Auction for the 2023-2024 year is supposed to happen in early June, though it has been postponed twice already. The new capacity rates of $50.00 are set to start on June 1st.
EIA chart

Weather

WARMER WEATHER CONTINUES IN THE EAST

weather map

We are expecting another scorching summer this year. The seven hottest summers have all been in the last seven years, and this summer is expected to be no different with high temperatures and possibly an active hurricane season.