Updated: May 8, 2019
Forward power prices trended downwards across most ISOs throughout the week, while physical gas spot prices experienced price increases across the board.
Financial gas markets trade higher, with the contract for November 2018 rising $0.04 (1.1%) to $3.32/MMBtu. The 12-month strip averaging November 2018 through October 2019 futures contracts ticked $0.02 (0.7%) higher to finish the week at $2.992/MMBtu.
Physical gas spot prices experienced price increases across the board. Boston’s Algonquin Citygate prices rose $0.87 (28.5%) to $3.92/MMBtu. Transco Zone 6 NYC increased $0.47 (16%) to $3.40/MMBtu.
Tennessee Zone 4 prices increased $0.26 (9.2%) to $2.82/MMBtu. Dominion South, serving southwest Pennsylvania, increased $0.29 (10.4%) to $3.07/MMBtu. Chicago Citygate prices increased $0.04/MMBtu (1.2%) to $3.41/MMBtu.
SoCal Citygate prices jumped $1.36 (37%) to $5.03/MMBtu. Prices at Northern California PG&E Citygate increased $0.05 (1.3%) to $3.82/MMBtu.
Forward prices in northeast ISOs generally trended downwards throughout the week. In ISONE, the NEMASSBOST zone lost $0.51 (-1.1%) on the 12 Month ATC strip, settling down to $47.73. The 24 Month ATC strip fell $0.22 (-0.5%) to $46.90 and the Cal 2019 ATC strip fell $0.45 (-0.9%) to $46.67/MWh.
For the NYC zone in NYISO, the 12 Month ATC strip dropped $0.32 (-0.7%) to $42.51. The 24 Month ATC strip fell $0.31 (-0.8%) to $41.87 and the Cal 2019 ATC strip fell $0.21 (-0.5%) to $41.59/MWh.
For the PEPCO zone in PJM, the 12 Month ATC strip decreased $0.17 (-0.4%) to $40.31. The 24 Month ATC strip decreased $0.04 (-0.1%) to $39.10 and the Cal 2019 ATC strip also dropped $0.04 (-0.1%) to $39.51/MWh.
In ERCOT, forward prices saw minor gains throughout the week. For the Houston zone, the 12 Month ATC strip increased $0.26 (0.6%) to $43.93. The 24 Month ATC strip increased $0.20 (0.5%) to $40.89 while the Cal 2019 ATC strip increased $0.25 (0.6%) to $42.72/MWh.
There is no headroom available this week. For more information on a specific term or utility, please contact TrueLight.
For the week ending October 12, the EIA reported net injections into storage of +81 Bcf, which is higher than last year’s net injections of +55 Bcf for this week as well as the 2013-2017 average net injections of +79 Bcf.
Working natural gas stocks totaled 3,037 Bcf, which is 601 Bcf (-16.5%) lower than last year’s level and 605 Bcf (-16.6%) lower than the five year average for the same week.
For the January 2019 futures contract, working gas stocks continue to trade at a lower premium, with NYMEX averaging at $3.34/MMBtu which is $0.05/MMBtu higher than the spot price. Last year at this time, the January 2019 contract was $0.28/MMBtu higher than the spot price.
Supply & Demand
The EIA reported that the average total supply of natural gas decreased by 1% week/week. Dry natural gas production remained unchanged, while average net imports dropped off 14% from the previous week due to the explosion on Enbridge’s Westcoast Energy pipeline near Prince George, British Columbia.
Total U.S. consumption of natural gas increased by 6% week/week, chiefly driven by a 73% increase in residential-commercial demand as colder temperatures swept over most of the country. With lower electricity demand, natural gas consumption for power generation decreased 18%. Industrial consumption increased 5% week/week while natural gas exports to Mexico decreased by 5%.
LNG exports increased week/week with five LNG vessels departing US ports.
FirstEnergy Pennsylvania has filed new default PTC rates with the PUC for the December 1, 2018 to February 28, 2019 price period. Tariffed residential PTC rates are as follows: Met-Ed will increase 10% to $0.06684/kWh, Penelec will increase 5% to $0.06288/kWh, PennPower will increase 16% to $0.07714/kWh, and West PennPower will increase 14% to $0.06354/kWh.
The New York State Public Service Commission (PSC) has predicted that this winter’s electricity prices should remain relatively unchanged from last year. Although natural gas prices will likely tick slightly higher, the NY PSC expects that a mild weather forecast for this winter will keep prices within the same ballpark as last year.
The Maine PUC has approved new large non-residential Standard Offer rates for Central Maine Power (CMP) and Bangor Hydro-Electric (BHE). Starting November 2018, prices are set to approximately $0.078876/kWh for CMP and $0.083602/kWh for BHE. Both of these charges include a baked-in capacity charge of $13.08/kW-month.
PJM has released its 5 Coincident Peaks (CP) and Weather Normalized Zonal Peaks for the Summer of 2018, which is utilized by member EDCs to develop the Peak Load Contributions that allocate load in the Reliability Pricing Model.
Normal seasonal temperatures will finally take over most of the lower 48 in the 8-14 day window, coming off of some more extreme temperature swings from a very warm early October to a recent swing to cold autumn weather. A pocket of below normal temperatures is likely to persist in the central plains and extend down into western Texas.
There is a fair degree of probability that a thin sliver of above normal temperatures will unfold along the Atlantic coast, with Florida seeing generally warm temperatures across the entire state. This coastal warmth also extends along the Gulf Coast. There is also high probability for above normal temperatures generally west of the Rockies.
Above normal precipitation accompanies a majority of the neutral air mass, with drier air being restricted to northern California.