Energy Market Update

Electricity Markets

Electric prices were broadly flat with Texas observing a slight drop. Forward pricing is still very attractive and trading quite near the lows of this past summer. Upward pressure is likely to be seen in the NYISO due to the impending closures of the first generator at Indian Point nuclear power plant in April 2020 as well as the just-announced closure of the coal-fired Kintigh Generating Station in Somerset, NY.

Far below-average temperatures brought expected volatility to the daily markets.

Natural Gas Markets

December 2019 and January 2020 are trading close to the lowest rates in recent history. 12-month futures are currently a very good value, but decreased drilling could put upward pressure on the markets.
Six-Month Natural Gas Futures
Futures as of 11/20/2019 versus previous week:
Dec-19 $2.545 -$0.055
Jan-20 $2.591 -$0.101
Feb-20 $2.541 -$0.109
Mar-20 $2.442 -$0.094
Apr-20 $2.281 -$0.079
May-19 $2.273 -$0.072
Natural Gas Inventory

As of Friday, November 15, 2019 working gas in storage was 3,638 Bcf. According to EIA estimates this represents a net decrease of 94 Bcf from the previous week. As predicted, the injection season has ended with a large withdrawal in the face of unseasonably cold temperatures. Though we are still 16.2% above levels at this same time last year, storage has now dipped below the 5 year average by -1.6%.

The Baker Hughes exploration gas rig count remained the same from last week, for a total of 129 rigs. This is 65 fewer rigs than the 194 in operation at this time one year ago.

Weather Update

The cold temperatures have receded north and settled in the northwest region. Warmer temperatures are anticipated throughout the southeast.

National Weather Service Updates (NOAA)

Hurricane Watch: No Current Hurricanes Click here to view the National Hurricane Center site. Equatorial Pacific Outlook: Click here to view La Nina and El Nino status.

Energy News

New construction natural gas ban trend appears on East Coast Lawmakers in a Boston suburb are set to vote to ban natural gas in new buildings, marking the Bay State’s first foray into a climate change policy that has unsettled the industry since it was pioneered in Berkeley, California, earlier this year. PJM power prices lowest since energy market created, market challenges persist: monitor PJM Interconnection’s inflation adjusted load weighted real-time energy prices were lower in the first nine months of 2019 than in the corresponding period of any year since PJM’s energy market was created in 1999, the independent market monitor said Thursday.   If you would like to receive the Energy Market Update to your inbox weekly, please click here to submit your name and email address. Disclaimer: This information is provided for the use of our customers and potential customers. Power Management Company assumes no responsibility or liability for the accuracy or completeness of pricing or information in this document. Historical data was obtained from sources that we believe to be reliable, but we do not guarantee its accuracy or completeness. It is not intended to provide advice or recommendation. Views are subject to change without notice.

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