ISO-NE & PJM have experienced a steady tick up on prices over the last few weeks, likely tied to increased oil and natural gas prices, although this report week did see some slight relief from this upward trend. NYISO continues to remain steady, providing a good opportunity to look at forward prices and hedge against future volatility. It’s important to not lose sight of how quickly prices can react, as they did in Texas with the news of planned plant closures. The Indian Point closure still looms on the East Coast, and what kind of capacity constraints this brings are still uncertain.
More seasonal temperatures have finally led to less spot price volatility.
Natural Gas Markets
Natural gas futures are down slightly from last week. The remainder of the 2018 strip still holding fairly steady in the $2.70- $2.80 range, with the exception of the very end of the year inching closer to $3.00.
Six-Month Natural Gas Futures
Futures as of 5/2/18 versus previous week:
Jun. $2.754 -0.053
Jul. $2.791 -0.053
Aug. $2.797 -0.055
Sep. $ 2.781 -0.054
Oct. $2.793 -0.053
Nov. $2.840 -0.050
Natural Gas Inventory
Finally, the first injection of the season was reported at 62 Bcf! Working gas in storage was 1,343 Bcf as of Friday, April 27, 2018. This injection was above the expectation of 53 Bcf for the week, but below the 5-year average of 129. In addition to elevated year-over-year production, similar demand to last year is expected for the first few weeks of May, so a dent in the storage deficit may finally start to be made for the first time this injection season. Although relatively low, there will likely be some upward pressure on natural gas, in order to get back to the storage level average.
NG Rig Count
The Baker Hughes exploration gas rig count increased 1 rig from the previous week for a total of 196 rigs. The report total is 23 rigs more than in operation last year when there were 173 rigs.
Above average temperatures are expected on the East and West Coast according to the NOAA 6-10 day forecast. The reminder of the CONUS will see average temperatures for the middle of May, with the exception of some areas surrounding the Great Lakes.
National Weather Service Updates (NOAA)
Hurricane Watch- No Activity: Click here to view the National Hurricane Center site.
Equatorial Pacific Outlook: Click here to view La Nina and El Nino status.
Energy News & Resources
Three nuclear plants owned by FirstEnergy can retire without threatening the reliability of electricity service, grid operator PJM said in a deactivation analysis released Monday.
Offshore wind may seem like a pricey option, but it’s actually an extremely valuable investment.
If you would like to receive the Energy Market Update to your inbox weekly, please click here
to submit your name and email address.