Natural Gas & Electricity Markets

Natural Gas

• NYMEX natural gas futures have been trading in the $2.50 - $2.70 / Dth range. 
• With 11 weeks remaining in traditional withdraw season. the EIA is expecting above average gas withdrawals.  
• Liquid natural gas (LNG) shipments have risen dramatically, and are expected to remain strong through the first quarter. As cold temperatures and higher markets persist in Asia, LNG exports continue to grow at record levels.
• As investors are seeking for ways to hedge against inflation, they are pouring more money into the energy sector, natural gas included.
• Natural gas is forecast to remain a larger part of power generation and will continue to rise even with more renewables coming on line.

• Electricity usage is expected to decline by 8% in 2021, much of the reduction will impact natural gas-fired power plants.
• 18% in growth is expected for the non-hydropower renewable energy sources (wind and solar). This is the fastest annual growth rate since 2010.
• In 2021 the EIA expects coal prices, and consequently coal generated power prices to rise to 6%.
• PJM capacity prices for June 2022 and beyond are still not published because the planned auctions are still under delay, as a result of the FERC MOPR rulings. PJM has recently announced that the base auction for the 2022/2023 delivery year will occur in May 2021.Subsequent base auctions will take place approximately every 6.5 months. 
• Look for accelerated market trends in sustainability initiativse during 2021.

• Moderate La Nina conditions have been apparent across the equatorial Pacific Ocean, as indicated by current oceanic and atmospheric observations. The La Nina is expected to persist through the Northern Hemisphere winter, with a potential transition to more neutral patterns during Spring 2021.