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MARKET TREND ANALYSIS

Weekly Energy Market Updates by Region - Archive

 

 

 


Issue week: January 23rd, 2020  (Wk 4)

 

POWER MARKETS

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WEST As natural gas prices continue to decline, not only because of overproduction but also because of forecasts of above-average temperatures over the next few weeks that have decreased heating demand, term prices have followed suit. The bearish sentiment has driven the front of the curve further down.

ERCOT   Term prices are down by a nickel to a dime out the curve as the fall in natural gas prices has offset the increase in term heat rates. Moderate demand is keeping a lid on real-time prices.

EAST DA prices have increased from last week after back-to-back storms blanketed the Northeast over the weekend. As the price of natural gas delivered to southeastern New York increased during the cold spell, local units became uneconomical and were priced out of the supply stack, increasing east-west congestion and pro-ducing a basis spread of $11/MWh for NYC. Because of a constraint on the Dunwoodie-Shore Rd. Line, RT prices are approximately $8/MWh over DA. With warmer weather forecast for the rest of Janu-ary, prices are expected to return to normal.

NATURAL GAS 

The EIA reported Thurs-day morning that, for the week ending January 17, U.S. inventories de-creased by 92 Bcf, vali-dating analysts’ predic-tion of 79-103 Bcf. Total stockpiles now stand at 2,947 Bcf, up by 23.2% from a year ago and 9.3% above the five-year average for the same week.

At 1:30 p.m. Pacific Time, February 2020 NYMEX contracts, which had traded as high as $1.975/MMBtu and as low as $1.915/MMBtu, were at $1.940/MMBtu, $0.014/MMBtu above yester-day’s close but more than $1.00/MMBtu below the closing price of $2.98/MMBtu for the February 2019 NYMEX contract last January 23.

 

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