Energy Market Update 09072022

Energy Market Update 09072022
Music Artist: Wu Tang Clan
Song Title: Triumph

NYMEX NG:~7.853/mmbtu down ~$1 from last weeks update
WTI:~$83.23/bbl down ~$6.00 from last weeks update
PJM RT LMP: ~$77.11/mWh energy
ERCOT RT LMP: ~$70.51/mWh
Long Island Zone K: ~$96.09/mWh
MISO: ~$78.36/mwh
Bitcoin: 18884

Weather

We are off to a warm September in most of the US. California and the west coast is feeling it big time with EEA3 called last night and forced outages happening in the ISO from the utilities. Still seeing 80’s on the east coast with above average temps coming through the 20th of Sept. Precepitation is also mirroring above normal in the same regions as the above normal temps. As we are technically in hurricane season, there arent any that are of significance. Earl and Danielle are now named with Earl the closest to Flordia and Danielle is much further north. Currently Earl is moving north at approximately 6 mph. With no major hurricanes on the way and warmer temps, we could be in store for a mild winter here in the US. NOAA’s seasonal outlook is approaching somewhat of a mild winter in the East and in the South. NOAA did predict with decent accuracy of what happened this summer, lets see if they can go 2/2 with their predictions. Also check out the national weather service link in the charts, just some funky colors all over the west with historic heat in Cali and the west coast in general. Remember folks, all weather models are predictions and thats all they will ever be.

Market Intel

And were off, EEA3 called in CAISO which is the highest level of ‘energy emergency’ that can be called. Forced outages happened and offtakers were sent text messages to curtail there demand for electricity. Interesting how the only ISO’s that have called an energy emergency were ones with heavy renewable generation. We had ERCOT a little over 1 year ago with winter storm URE and also this summer, along now with an EEA3 (highest level of emergency) in the CAISO. Now lets look at accross the pond where you have the new prime minister of the UK talking about putting in price caps AND also managing peak demand. Folks this is a politican saying this, not a grid operator or anyone with a half of energy brain. A world full of renewables, is this the path were we have to manage how we use the electrons? Im all about efficency however residental users are different than industrial. Let the residental customers play ball in these DR/LR markets, oh wait… all for me and none for thee, I suppose. LNG is becoming a hot topic as its been over the past couple of years. You have Mexico saying that they will be building out capacity as there certainly is a market for it. Meanwhile you have Europe saying that LNG expansion project will take around 5 years to develop and a price of 200mm of spot LNG cargo are extremely. Ultimately the global demand for LNG is there and certainly will drive domestic NG prices up however this takes time as i have been saying and it seems that others agree also. Near term will be extremely hard since the whole energy per unit time thing i harp about. If there isnt somewhat of a relief of a mild winter in the EU, who knows what will happen. Finally the EPA trying to put a stop to Cheniere’s move to waiver the gas fire turbine pollution rule. Its almost like these agencies are just trying to stop the engineers of allowing reliable fuel to hit the market. While its not helping price much, it will at least help people from freezing in winter if the LNG can be shipped out.

Electricity update

I talk a lot about NG simply because of how coorelated the pricing is to the pricing of electricity. Demand for NG is high in most ISO’s as you all know and understand. I want yall to see something however. Here are some ISO’s and zones within those ISO’s ATC block pricing for just Aug-21 in comparrison to Aug-22 (a YoY comparrison). See the Increases:

AECO: +58%
ComED: +54%
FEOhio: +54%
METED: +60.8
PSEG: +58%
Ameren (MISO): +54%
PECO: +59%