Market Update – January 15, 2021

 

This market update includes a natural gas storage update, electric and natural gas price movement, and a weather outlook. By utilizing this information, you can make better-informed energy decisions. This is general information to give you a quick summary of the market, please contact Patriot Energy Group for additional information.

Natural Gas

The amount of natural gas available for usage is very important in the energy industry because among other things, it is used for heating, and as the main fuel source for generating electricity at power plants to be consumed by both homes and businesses. By comparing current levels of natural gas storage to the levels of last year and the past five years, an assessment as to the state of natural gas supplies to meet demand can be made. With other conditions remaining the same, the general concept is: if there is more than enough supply prices go down, and if there is not enough supply prices go up. In addition to the long-term outlooks, we compare what the market was expecting to be each week (injection or withdrawal number) verse what actually took place, this will either push prices up or down respectively.

 

Estimates for the week ending 1/8/21 were for a withdrawal in the (128) to (129) Bcf range.

 

Storage is now 126 Bcf higher than last year, and 218 Bcf higher than the 5-year average, which is well within the 5-year historical range.

The total actual withdrawal came in above the estimate, with (134) Bcf being taken out of storage.

Henry Hub

Henry Hub Wholesale Calendar Year 2022 future prices started closer the 52-week low at the start of January 2020. Future prices continued to decline hitting the 52-week low at the beginning of March. Then from spring through the fall prices recovered and rallied all the way up to hit a new 52-week high at the end of October. Since then, future 2022 prices dropped off considerably to range around the 52-week average, although they are now starting to push back up. Currently Henry Hub prices are down about 4.5% from October 30th’s 52-week high, which is above the average by about 3.2%.

The chart below shows the price movement of Calendar Year 2020 Henry Hub Wholesale Natural Gas over the past 52 weeks which is represented by the blue line. The price of Calendar Year 2020 Henry Hub Wholesale Natural Gas is shown on the left axis in relation to the date of the pricing on the bottom axis. Also, for comparison, there is a green line showing the highest price, an orange line showing the average price and a red line showing the lowest price over the past 52 weeks.

The chart below on the left is an enhanced look at the price movement shown above of Calendar Year 2020 Henry Hub Wholesale Natural Gas over just the past 5 weeks. The table below on the right are the numerical values that correspond to the chart below. The high, low, and average values are still based on the past 52 weeks.

Algonquin City Gate

Algonquin Wholesale Calendar Year 2022 future prices started at the 52-week high in January last year. Future prices then cratered as winter progressed to hit a new low after new low, with the lowest of those points coming in March. Since then, Algonquin 2022 future prices recovered thru the summer and into the fall, pushing above the average and trending towards the 52-week high. There was a short-lived price crash at the end of last year that established the new 52-week low, however, prices have recovered quickly and have now pushed above the 52-week average. Currently, Algonquin prices are down about 6.1% from the 52-week high that was last January, and above the average by around 5.6%.

The chart below shows the price movement of Calendar Year 2020 Algonquin Wholesale Natural Gas over the past 52 weeks which is represented by the blue line. The price of Calendar Year 2020 Algonquin Wholesale Natural Gas is shown on the left axis in relation to the date of the pricing on the bottom axis. Also, for comparison, there is a green line showing the highest price, an orange line showing the average price and a red line showing the lowest price over the past 52 weeks.

The chart below on the left is an enhanced look at the price movement shown above of Calendar Year 2020 Algonquin Wholesale Natural Gas over just the past 5 weeks. The table below on the right are the numerical values that correspond to the chart below. The high, low, and average values are still based on the past 52 weeks.

ISO-NE

ISO-NE Wholesale Internal Hub Around-the-Clock Calendar Year 2022 future prices started at the 52-week high in January last year. At the start of 2020, the future prices fell off a cliff, with ISO-NE Calendar 2022 future prices hitting a new low point at the end of March. Since March, prices recovered thru the summer and into the fall, pushing above the average and trending towards the 52-week high. Prices then dropped off at the start of December to move below the 52-week average, but they have recovered quickly and are now a little above the average. Currently, ISO-NE prices are down around 7.6% from the 52-week high that was last January, and above the average by around 1.3%.

The chart below shows the price movement of Calendar Year 2020 ISO-NE Internal Hub Wholesale Around-the-Clock Electricity over the past 52 weeks which is represented by the blue line. The price of Calendar Year 2020 ISO-NE Internal Hub Wholesale Around-the-Clock Electricity is shown on the left axis in relation to the date of the pricing on the bottom axis. Also, for comparison, there is a green line showing the highest price, an orange line showing the average price and a red line showing the lowest price over the past 52 weeks.

 

The chart below on the left is an enhanced look at the price movement shown above of Calendar Year 2020 ISO-NE Internal Hub Wholesale Around-the-Clock Electricity over just the past 5 weeks. The table below on the right are the numerical values that correspond to the chart below. The high, low, and average values are still based on the past 52 weeks.

TETCO-M3

TETCO-M3 Wholesale Calendar Year 2022 future prices started a little below the 52-week average around the same time last year in January. From there TETCO-M3 2022 future prices first fell sharply as the winter progressed to hit a low point at the start of February. Next, TETCO-M3 2022 prices rallied off the lows, pushed above the average, and spiked all the way up to establish the new 52-week high at the end of October. Since then, prices dropped off to range around the average, although they are now pushing up towards the 52-week high. Currently, TETCO-M3 prices are down around 3.4% from Oct 30th’s 52-week high, and above the average by around 4.6%.

The chart below shows the price movement of Calendar Year 2020 TETCO-M3 Wholesale Natural Gas over the past 52 weeks which is represented by the blue line. The price of Calendar Year 2020 TETCO-M3 Wholesale Natural Gas is shown on the left axis in relation to the date of the pricing on the bottom axis. Also, for comparison, there is a green line showing the highest price, an orange line showing the average price and a red line showing the lowest price over the past 52 weeks.

The chart below on the left is an enhanced look at the price movement shown above of Calendar Year 2020 TETCO-M3 Wholesale Natural Gas over just the past 5 weeks. The table below on the right are the numerical values that correspond to the chart below. The high, low, and average values are still based on the past 52 weeks.

PJM Western Hub

PJM Wholesale Western Hub Around-the-Clock Calendar Year 2022 future prices started a little above the 52-week average last year in January. PJM 2022 future prices then cratered for the winter to hit a low point at the beginning of March. Since then, prices rallied off the lows, pushed above the average, and spiked all the way up to establish the new 52-week high near the end of November. Since then, prices dropped off to range near the average, although they are now pushing up towards the 52-week high. Currently, PJM prices are around 2.4% below Nov 24th’s 52-week high, and above the average by about 4.2%.

The chart below shows the price movement of Calendar Year 2020 PJM Western Hub Wholesale Around-the-Clock Electricity over the past 52 weeks which is represented by the blue line. The price of Calendar Year 2020 PJM Western Hub Wholesale Around-the-Clock Electricity is shown on the left axis in relation to the date of the pricing on the bottom axis. Also, for comparison, there is a green line showing the highest price, an orange line showing the average price and a red line showing the lowest price over the past 52 weeks.

The chart below on the left is an enhanced look at the price movement shown above of Calendar Year 2020 PJM Western Hub Wholesale Around-the-Clock Electricity over just the past 5 weeks. The table below on the right are the numerical values that correspond to the chart below. The high, low, and average values are still based on the past 52 weeks.

General Disclaimer: This information is provided as a courtesy to our clients and/or potential clients and should not be construed as an offer to sell or as a solicitation of an offer to buy securities based on, or contracts in or for, any energy commodity. Patriot Energy does not sell electricity and/or natural gas, and as such, the actual terms and conditions of competitive supply are solely provided for by the competitive supplier’s contract with the client. Reliance on this information for decisions is done so at the sole risk of the reader and past performance is not indicative of future results. This information is provided as a general description of various electricity and/or natural gas purchasing strategies that may be decided upon by our clients. Both clients and potential clients should consider their individual circumstances and other sources of available information before arriving at a decision. Graphs and charts are for illustrative purposes only.

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