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MARKET TREND ANALYSIS

Weekly Energy Market Updates by Region - Archive

 

 

 


Issue week: March 5th, 2020  (Wk 10)

 

POWER MARKETS

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WEST Soft index prices were the story throughout February as light demand and strong hydro and wind generation conspired to sink the implied heat rate. In the term market, however, prices are up after the projected water levels in the Pacific Northwest were revised down to 100% of normal.

ERCOT  Term prices have ranged from staying flat to rising by a quarter out the curve as term heat rates and term natural gas continue to bobble. Real-time prices have been in the low $20s/MWh in all regions save, of course, the West Load Zone, where basis has averaged over $75/MWh to start the month. The new ORDC calculation methodology went into effect as of March 1, but the impact has been minimal over the first four days.

EAST Both DA and RT indexes remain low across trading hubs. So far this week, prices have printed in the high $10s/MWh to low $20s/MWh. With warm weather expected through next week, the emergence of any typical winter pricing trends looks doubtful at this point. This winter may go down as an overall quiet one.

NATURAL GAS 

The EIA reported Thursday morn-ing that, for the week ending February 28, U.S. inventories de-creased by 109 Bcf, roughly in the middle of the projected range of 96-117 Bcf. Total stockpiles now stand at 2,091 Bcf, up by 48.2% from a year ago and 9.2% above the five-year average for the same week.

NYMEX prices continued to test the bottom as this morning's unsurprising storage report, in conjunction with forecasts of warmer weather, appeared to drive the downhill price move-ment. Near-term investors may also wonder what impact China’s decision to declare force majeure on some LNG imports will have on overall demand. The bulls may see red and try to push prices higher once that demand returns. Nonetheless, the front-month NYMEX contract today traded as low as $1.755/MMBtu, $0.052/MMBtu below Wednesday’s close. In fact, all active months through May 2022 are trading modestly lower. In California, basis showed slight gains at PG&E Citygate for 6 to 60 months out. At SoCal Border, basis was slightly higher for the prompt month through 6 months out but lower afterward through 60 months out.

 

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