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MARKET TREND ANALYSIS

Weekly Energy Market Updates by Region

 

 

 


Issue week: December 23rd, 2021  (Wk 51)

 

POWER MARKETS

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WEST  Volatility remains strong in the regional hubs as the El Paso pipeline remains out of commission from the August explosion, depressing the amount of transport gas available to South ern California from the Permian Basin, and temperatures are expected to drop, increasing heating demand. Since the start of the week, the extreme cold has pushed the Q1 2022 forward curve higher by approximately $42/MWh in both CAISO and Mid-C. The rate of natural gas depletion will be extremely consequential in the near term.

EAST Bullish forward curves over the past year have proven accurate. On average, this month’s DALMPs and RTLMPs are 64% and 58% higher, respectively, than those of December 2020. In the Day Ahead market, the biggest movers since last year are ISO NE’s Mass Hub and MISO’s Indy Hub, which logged respective increases of $28/MWh and $22/MWh. PJM’s West Hub and NYISO’s Hudson Valley and NYC recorded more modest Day Ahead increases of roughly $15/MWh.

NATURAL GAS 

The EIA reported Thursday morning that, for the week ending December 17, U.S. inventories shrank by 55 Bcf. Total stockpiles now stand at 3,367 Bcf, down by 6.5% from a year ago but 1.0% above the five year average for the same week.

Throughout the month, the prompt-month January NYMEX Henry Hub contract has traded between $3.50/MMBtu and $4.10/MMBtu. Unusually high temperatures in most of the country during December have kept prices in check stateside, whereas, in Europe, prices on the Title Transfer Facility index are north of $44/MMBtu, even after a 20% correction today.

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