Natural Gas & Electricity Markets

Natural Gas

• After having risen above $3.00, 1st Quarter NYMEX prices have been trading in the $2.90 range.
   
• Moving into December, all week over week natural gas futures prices have fallen.
   
• Natural gas inventories are 9% above last year and 7% above the 5-year average as we move into December. The number of rigs producing gas is +1 over one year ago.
   
• Year over year demand for natural gas for power generation is down nearly 14%.
   
• After a steep fall during the pandemic, liquid natural gas (LNG) shipments have risen dramatically, and are expected to remain strong through the first quarter.

Electricity

• PJM forward pricing rose over the Thanksgiving week following a few weeks of a falling market.CY 2021 pricing especially has seen a downward trend as the market is seeing less risk as we head through the winter.
   
• Day-ahead pricing has dropped considerably against last year's market on significantly reduced usage and demand across the ISO.
   
• PJM forwards are sitting 7-14% off of all time lows. MA and NY markets are lower yet.
   
• PJM's capacity auctions have been delayed over FERC's MOPR rulings. The Minimum Offer Price Rule (MOPR) mitigates the state-subsidized resources toward renewable energy on the capacity market. The MOPR order will have definite consequences for clean energy. It will almost certainly result in a cost increase for consumers. However, the final impact on PJM and the future of its capacity market(s) is still unclear.

Weather

• In the near term, cooler temperatures are developing across the eastern two thirds of the country. Milder weather will be more prevalent in the west and northwest.
   
• Right now January is expected to be warmer-than-normal though not necessarily as mild as the past winter.