Weekly Energy Market Updates by Region - Archive




Issue week: January 30th, 2020  (Wk 5)





WEST As January comes to a close, the above-average tempera-tures, expected to continue through February, and strong snowpack continue to drive forwards down. The downturn in heating demand has considerably relaxed demand for natural gas and consequently softened spot prices over the past week.

ERCOT   With mild winter weather across the state, 7x24 real-time prices look to settle at an average of $16/MWh for January across all zones except the West Load Zone, where congestion has yielded an average of $22/MWh for the month. The ongoing collapse in front-month natural gas prices continues to take its toll on 7x24 forward prices. Since the beginning of November, when NG prices began their descent, forward prices are down by approximately $2.50/MWh.

EAST Prices have come back down from the jump seen last week. Both DA and RT prices in the main trading hubs in PJM, MISO, ISO-NE, and NYISO have averaged from the high teens to the low $20s/MWh for the week with minimal DART spreads.  







The novel Coronavirus spreading through China is consist-ently making headlines as mortality and confirmed case sta-tistics are updated daily.  And although various world gov-ernments are keenly tracking this data, what’s more ob-scure is the virus’ ripple effects on the world economy.  With many publicly traded companies currently reporting earnings, additional insight can be gleaned as company ex-ecutives mingle with analysts and investors on earnings calls.  From food sales to entertainment to airlines, many sectors of China’s economy have already been affected and the impacts are trickling through to American compa-nies and their investors.  Here are some notable examples: 

Starbucks: Closed more than half of its stores in main-land China. 
McDonald’s: Closed several hundred stores in the af-fected Hubei Chinese province (as reported by Reuters) 
Apple: Closed one retail store in China and is restrict-ing corporate travel to the region.  The company warned hardware production could be affected as Chinese factories remain closed. 
United Airlines: Suspending at least 24 round trip flights between the US and China. 
Disney: Disneyland has been temporarily closed in Shanghai and Hong Kong. 


Additionally oil prices have dipped around $5 per barrel in the past week and Reuters reports that jet fuel prices are plummeting in Asia.  Meanwhile the Centers for Disease Control has advised against unnecessary travel to China and the White House is reportedly considering a complete ban on travel to China - any further travel restrictions will put additional downward pressure on oil prices. 
Only a handful of coronavirus cases have been confirmed in the U.S. yet American companies – and their investors – have already been affected by the disease outbreak.  The financial harm appears minimal at this time but it remains to be seen whether the virus will lead to more serious financial contagion.





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