Energy Market Update
Drill down into how to optimize energy services.
March 2023
Edge Insights energy experts are constantly monitoring energy market conditions in order to help ensure the best possible pricing and contract terms for our clients. The following report is a snap shot of current conditions intended to help our clients stay informed of market dynamics.
Market Overview
In the Northeast, 40% of electric generation is produced using natural gas. The high electric rates are due to the high natural gas prices over the past year or more. The charts below show that the market has dropped substantially due to the above normal temperatures for January and February.
The low demand time of April & May usually offers the best opportunities to consider renewing energy contracts. Higher than average natural gas storage levels should keep prices in the current range, but investors will react quickly to news of increasing demand. High market volatility is being driven by high energy prices in Europe, the reopening of the Texas LNG plant this month, and regulations affecting fossil fuels in the future.
This chart shows the natural gas NYMEX Futures historic to current market average strip prices. The out years of 2025 through 2027 are rebounding from the low on Feb 22nd.
Electric Market 12-month average prices for current and future years shown in the chart below.
Natural Gas Storage Update
The storage report for week ending 3/3/23 shows a withdrawal from storage of 84 Billion Cubic Feet (Bcf). This puts levels above the 5-year average by 21.5%, and 32.1% above the same week last year. The current percentage of total capacity is 47.2% at 2,030 Bcf.
The February natural gas Monthly Settlement Price (MSP) was determined on February 24th, at $2.451/Dth, down $0.658/Dth from the prior month.
The chart below shows the natural gas storage levels going back 24 months.
Other Energy News
The Short-Term Energy Outlook (STEO) published by the U.S. Energy Information Administration offers a complete energy review each month. Follow this link for the latest release. https://www.eia.gov/outlooks/steo/
Market Opportunity
Contract purchase rating is excellent, especially the nearest terms. The market has now moved into contango with the years further out trading slightly higher. Short and long-term energy contracts are considered a bargain and will provide cost protection.
The market opportunity is a ranking of how we perceive timing of contract purchases for natural gas or electric. Information provided by the Energy Division of Edge Insights, Inc.
February 2023
Edge Insights energy experts are constantly monitoring energy market conditions in order to help ensure the best possible pricing and contract terms for our clients. The following report is a snap shot of current conditions intended to help our clients stay informed of market dynamics.
Market Overview
Currently, there are two primary factors being watched that will have near-term impact the futures market for energy. They are the seasonal gas storage levels and increased demand once the Texas LNG plant reopens in March. Because of the above average temperatures, especially across the high population areas of the eastern U.S. during January and continuing in February, the projected storage level at the end of the heating season could be 16% above the 5-year average. When the demand from the reopening of the LNG plant in Texas finally does happen, the impact may not be as substantial as once thought.
The topics being discussed are whether or not we are at a market bottom. If natural gas production increases to over 100k Mcf’s per day as it was last December, and any additional delay occurs with the Texas LNG plant, some analysts suggest a continued market decline could become a reality. We will have to wait and see.
This chart shows the natural gas NYMEX Futures historic to current market average strip prices. The near months from March ’23 out 12 months are now trading below the outer years.
Electric Market 12-month average prices for current and future years shown in the chart below.
Natural Gas Storage Update
The storage report for week ending 2/10/23 shows a withdrawal from storage of 100 Billion Cubic Feet (Bcf). This puts levels above the 5-year average by 8.8%, and 16.9% above the same week last year. The current percentage of total capacity is 52.6% at 2,266 Bcf.
The February natural gas price was determined on January 27th, and settled at $3.109/Dth, down $1.599/Dth from the prior month.
The chart below shows the natural gas storage levels going back 24 months.
Other Energy News
The Short-Term Energy Outlook (STEO) published by the U.S. Energy Information Administration offers a complete energy review each month. Follow this link for the latest release. https://www.eia.gov/outlooks/steo/
Market Opportunity
Contract purchase rating is excellent, especially the nearest terms. The market has now moved into contango with the further out years being higher. The recent drop in natural gas prices on weather and gas storage levels is making short- and long-term energy contracts an attractive buying opportunity.
The market opportunity is a ranking of how we perceive timing of contract purchases for natural gas or electric. Information provided by the Energy Division of Edge Insights, Inc.
January 2023
Edge Insights energy experts are constantly monitoring energy market conditions in order to help ensure the best possible pricing and contract terms for our clients. The following report is a snap shot of current conditions intended to help our clients stay informed of market dynamics.
Market Overview
After the extreme cold period in December, the weather has moderated substantially. The remaining weeks of January are forecast to be above-normal temperatures for most of the lower 48 states. This has caused the NYMEX commodity market for natural gas and electric to drop. It is still early to tell, but forecasts are now showing February to be colder than normal.
The Texas LNG export facility that has been shut down since June, may come online later in January. When it does, this increase in demand will likely drive prices higher.
Warm temperatures across Europe are helping to lessen the impact of having less natural gas available due to sanctions against Russia. Having ample storage for next winter is still a major concern for them, as the U.S. and other countries help to provide as much LNG as possible. Building new LNG re-gasification facilities contradict climate policy promises and puts them in a difficult position.
This chart shows the natural gas NYMEX Futures historic to current market average strip prices.
Electric Market 12-month average prices for current and future years shown in the chart below.
The January natural gas trading month price was determined on December 27th, and settled at $4.708/Dth, down $2.004/Dth from the prior month.
Natural Gas Storage Update:
The storage report for week-ending 12/30/22 shows a withdrawal from storage of 221 Billion Cubic Feet (Bcf). This puts levels below the 5-year average by 6.7%, and 9.6% below the same week last year. The current percentage of total capacity is 67% at 2,891 Bcf.
The chart below shows the natural gas storage levels going back 24 months.
Other Energy News:
The Short-Term Energy Outlook (STEO) published by the U.S. Energy Information Administration offers a complete energy review each month. Follow this link for the latest release. https://www.eia.gov/outlooks/steo/
Market Opportunity
Contract purchase rating is good. The market has now moved into contango with the further out years being only slightly higher. The recent drop in natural gas prices on weather is making short- and long-term energy contracts an attractive buying opportunity. We will give a rating of excellent if we see any additional drop.
The market opportunity is a ranking of how we perceive timing of contract purchases for natural gas or electric. Information provided by the Energy Division of Edge Insights, Inc.
December 2022
Edge Insights energy experts are constantly monitoring energy market conditions in order to help ensure the best possible pricing and contract terms for our clients. The following report is a snap shot of current conditions intended to help our clients stay informed of market dynamics.
Market Overview
Temperatures are forecast to be below average in the 8-to-14-day outlook, and investors are eyeing the Freeport, TX LNG export facility to be back online late December or early January. This facility has been down since June ’22 due to a fire. The natural gas that would normally go to this plant was diverted to domestic storage, which pushed the level to briefly breach the 5-year average.
We are in the third year of a La Niña weather pattern. This creates an unpredictable Jet Stream which can force Canadian air down into the central and easter U.S. This also can cause more Nor’easters by pulling warm moist southern air up the eastern coast into cold air. This weather pattern is forecasted to turn to an El Niño pattern towards spring.
The EIA.gov is predicting that natural gas wholesale price will continue to trade above $5/Dth for 2023.
This chart shows the natural gas NYMEX Futures historic to current market average strip prices.
Electric Market 12-month average prices for current and future years shown in the chart below.
The December natural gas trading month price was determined on November 28th, and settled at $6.712/Dth, up $1.526/Dth from the prior month.
Natural Gas Storage Update:
The storage report for week ending 12/2/22 shows a withdrawal from storage of 21 Billion Cubic Feet (Bcf). This puts levels below the 5-year average by 1.6%, and 1.5% below the same week last year. The current percentage of total capacity is 81% at 3,483 Bcf.
The chart below shows the natural gas storage levels going back 24 months.
Other Energy News:
The Short-Term Energy Outlook (STEO) offers a complete picture of crude oil, refining of heating oil, natural gas production, LNG exports, and electricity.
Follow this link for the December 6th release: https://www.eia.gov/outlooks/steo/
Market Opportunity
12-month term contract rating is fair, while longer terms are good. The recent spike in natural gas on weather is affecting short-term contracts. Waiting may be an option as a potential warm-up is showing in the 3 to 4-week forecast.
The market opportunity is a ranking of how we perceive timing of contract purchases for natural gas or electric. Information provided by the Energy Division of Edge Insights, Inc.
This chart shows the natural gas NYMEX Futures historic to current market average strip prices.
Electric Market 12-month average prices for current and future years shown in the chart below.
Other Energy News: Diesel Fuel Shortage?
CLAIM: The United States is on the verge of running out of diesel fuel.
AP’S ASSESSMENT: False. While data from the Energy Information Administration shows that the U.S. has about a 25-day supply of diesel, the country will not actually run out of fuel soon, experts confirmed to The Associated Press. This figure doesn’t account for ongoing diesel production.
THE FACTS: As of Oct. 28, the most recent data available, the U.S. had 25.8 days’ worth of diesel in its stores — a lower supply than in previous weeks, according to the EIA. That figure, paired with still-high fuel prices domestically and a looming energy crisis in Europe, has some social media users suggesting that in less than a month, no diesel fuel will be available.
“Diesel is going to run out in weeks,” reads text in a TikTok video posted Sunday, as a large truck spewing exhaust from its hood drives past the camera. That clip had been viewed more than 125,000 times as of Monday.
“US sending another $400 million to Ukraine… By the way, we are about out of diesel fuel,” read a tweet posted Friday, receiving more than 4,000 shares.
Read the full article on the web at AP News.com
But this is a misunderstanding of the EIA data, according to agency spokesperson Jeff Barron. He explained that it accounts for current consumption without factoring in the oil that’s imported or produced by refineries, which refill supply.
Visit EIA.gov for Electricity Monthly Updates
Market Opportunity
12-month term contract rating is fair, while longer terms are good. Recent pull back on natural gas prices is allowing opportunity to act. Fixing a gas or electric rate will protect against winter spikes.
The market opportunity is a ranking of how we perceive timing of contract purchases for natural gas or electric. Information provided by the Energy Division of Edge Insights, Inc.
Note: Our clients have the option of purchasing 100% of their electricity from renewable sources, such as wind and solar. Speak to your Edge Insights representative for more information.
Benchmarking electric and gas consumption will let you quantify your energy efficiency efforts. Talk to your Edge Insights account representative to learn how you can start a “Green Initiative” program for your business.