Market Outlook

Natural Gas

NYMEX Natural Gas Pricing

The July 2021 contract settled at $3.617/MMBtu.
The August 2021 contract is trading around $3.66/MMBtu (as of 7/1/2021).

Source: CME Group

Natural Gas Storage

Current BCF in Storage (2021 vs 2020):

Week Ending	BCF	Week Ending	BCF
04-Jun-21	2,411	05-Jun-20	2,807
11-Jun-21	2,427	12-Jun-20	2,892
18-Jun-21	2,482	19-Jun-20	3,012
25-Jun-21	2,558	26-Jun-20	3,077

There is about 17% less in underground storage now than there was at this time last year..

Source: EIA
 

Market News

U.S. natural gas storage capacity has remained flat over the past eight years

https://www.eia.gov/todayinenergy/detail.php?id=48216

Both measures of storage capacity, design capacity and demonstrated peak capacity, have remained unchanged for the past few years. Design capacity increased 0.1% since 2019, but demonstrated peak capacity decreased by about 0.2% - mainly due to the large decrease in the Pacific region.

Electric power sector CO2 emissions drop as generation mix shifts from coal to natural gas

https://www.eia.gov/todayinenergy/detail.php?id=48296

In 2019, the electric sector produced 1,724 MMmt of CO2, which is 32% less than in 2005. However, this trend could change due to high natural gas pricing. The Henry Hub natural gas spot price is forecasted to average $3.07/MMBtu due to increases in consumption and exports that outpace expected growth in production and imports.

U.S. natural gas exports and non-power sector demand to drive higher prices through 2022

https://www.eia.gov/todayinenergy/detail.php?id=48456

The Henry Hub natural gas spot price is forecasted to average $2.93/MMBtu in 2022 as a result of supply outpacing US demand in the near future.

Nuclear capacity increases by 4.5 GW in long-delayed 'MOPRed' PJM auction, coal loses 8 GW

https://www.utilitydive.com/news/nuclear-capacity-increases-by-44-gw-in-long-delayed-mopred-pjm-auction/601208/

Nuclear generation cleared the most additional capacity compared to the previous capacity auction, at an additional 4,460 MW. Gas generation increased by 3,414 MW and solar and wind increased by 942 MW and 312 MW, respectively. Meanwhile, coal-fired generation cleared 8,175 fewer MW than the last auction. In addition to lower load forecasted by PJM, transmission capability improved in some areas, contributing to the dramatic price drop of $50/MW-day on average throughout the ISO, compared to $140/MW-day in 2018.

New England states push for governance changes in ISO-NE, ahead of anticipated MOPR reform

https://www.utilitydive.com/news/new-england-states-push-iso-ne-governance-changes-mopr-caspr-reform/601342/

Almost every state in the ISO New England (ISO-NE) footprint has an ambitious clean energy goal. But efforts by ISO-NE to prevent price suppression in the region resulted in tensions between the regional operator and state officials. Parallel to the issues in the PJM market, the states in New England are battling with the grid operator, stating unfair rulings in the current capacity auctions are interfering with laws binding them to provide clean energy. The uncertainty of the future of capacity translates to greater financial risk.