Natural Gas & Electricity Markets

Natural Gas

• Natural gas fundamentals drivers are mostly bullish. Storage inventories are below the five-year average and well below last year. Expectations of warmer than normal summer weather and the on-going drought in the West will likely be supportive of power generation demand – mitigating headwinds from renewable additions and fuel switching due to stronger gas prices.
• U.S. natural gas production is currently holding around 90.1 Bcf per day. 
• Rig counts are are up significantly from last year.
• For the week ending June 11, 2021, storage inventories stood at 2,427 Bcf. Inventories are 126 Bcf below the five-year average and 453 Bcf below last year.
• LNG (liquid natural gas) exports have softened, but are still 5.5 Bcf/day ahead of June 2020.

• Most region forward curves are showing a rise in electricity prices over the last several months. Prices can be expected to remain elevated somewhat throughout the summer.

• Temperatures in the Midwest had reached the high 80s and 90s, but have since moderated. The Midwest is expected to end June with very little rain.
• The West is expected to have continuous heat and drought conditions
• Much of the East is in a cooling trend.
• The Southeastern region is expected to have above normal rainfall.