Weekly Energy Market Updates by Region




Issue week: January 20th, 2022  (Wk 3)





WEST  Strong natural gas prices in Southern California have kept the Day Ahead average in CAISO around $54/MWh over the course of January. In Mid-C, the Day Ahead average is about $14/MWh less than in CAISO because of robust regional hydro generation. In the forward market, term prices from CY 2022 forward have moved up as supply-chain shortages have delayed the development of utility-scale battery storage facilities. The longer the postponement, the less capacity projected on the grid both this summer and next.

ERCOT  Real-time prices have not yet reached the highs of last year but still could as temperatures continue to fall over the next two weeks. As of this writing, spot prices are in the mid-$30s/MWh, and real-time prices for the month to date are averaging in the low $30s/MWh. Term prices are down by nearly 10% from last week in the very front of the curve because of falling gas prices. Over the next two weeks, spot prices are projected to drop to $40-$60/MWh, depending not only on weather but also on the balance between thermal and wind/solar output.

EAST LMPs remain elevated in both ISO-NE and NYISO, thanks to the cold front in the East; both Day Ahead and Real Time in the two regions are even higher than last week. In ISO-NE’s Mass Hub, Day Ahead is averaging $166/MWh, $10/MWh greater than Real Time. In NYISO’s NYC and Hudson Valley, Day Ahead is somewhat more reasonable but still averaging around $135/MWh, approximately $6/MWh less than Real Time. To illustrate how extreme prices are in the Northeast, this week’s Day Ahead average in MISO’s Indy Hub is only $49/MWh, $3/MWh less than Real Time. In PJM’s West Hub, Day Ahead is averaging $74/MWh, $6/MWh under Real Time.


The EIA reported Thursday morning that, for the week ending January 14, U.S. inventories decreased by 206 Bcf, only 8 Bcf more than the expected decrease of 198 Bcf. Total stockpiles now stand at 2,810 Bcf, down by 7.4% from a year ago but 1.2% above the five-year average for the same week.

Making a sharp U-turn back south of $4/MMBtu, the NYMEX Henry Hub prompt month of February finished the day at $3.802/MMBtu, $0.229/MMBtu less than yesterday’s final and $0.468/MMBtu less than last Thursday’s close. Interestingly, the one-week dip is an almost perfect inversion of last Thursday’s increase of $0.46/MMBtu from the first Thursday of the month. This prompt-month contract will not expire for another seven days, setting the stage for another potential rollercoaster of a week before it finishes.







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