Energy Market Update

Electricity Markets

All electric ISO’s took a slide over the report week following a drop in natural gas prices.

Temperatures were 10+ degrees below normal for most of the report week but the day-ahead market still remains unphased.

Natural Gas Markets

The NYMEX prompt month, June 2020, contract had a sharp drop down $0.33 over the report week while the 12-month strip fell $0.20. Even with production pulling back to below where we were last year at this time, natural gas storage reserves remain at a steep surplus to both last year’s and the 5-year average levels. If storage-building continues this upward trajectory throughout the rest of the injection season, this would help to hamper volatility.

Futures as of 5/13/2020 versus previous week:

Jun-20 $1.616 -$0.328
Jul-20 $1.856 -$0.315
Aug-20 $1.957 -$0.297
Sep-20 $2.018 -$0.290
Oct-20 $2.113 -$0.276
Nov-20 $2.404 -$0.211
Natural Gas Inventory

The EIA reported a net injection of 103 Bcf from the previous week. Working gas in storage was 2,422 Bcf as of Friday, May 8, 2020. This injection was lower than expectations, but still higher than the 85 Bcf five-year average.

 

The Baker Hughes exploration gas count decreased 1 rig over the report week for a total of 79. This is 106 fewer rigs than the 185 in operation at this time one year ago.

 

Weather Update

Both the East and West coast are forecast to see above normal temperatures for the latter part of May. The Rocky Mountains is the only region that looks to have the highest probability for cool anomalies during the next few weeks.

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

News – US EIA cuts gas, power consumption estimates amid impact of pandemic

The US Energy Information Administration lifted its Henry Hub natural gas price forecast for the second and third quarters of 2020 on Tuesday, even as the agency substantially trimmed its estimates for production and consumption over the same period, citing coronavirus pandemic-related impacts.

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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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