Weekly Energy Market Updates by Region

Issue week: July 14th, 2022  (Wk 28)

 

POWER MARKETS

 

WEST  Expectations of above-average temperatures through the end of July lifted balance-of-the-month on-peak prices in SP15 to $104/MWh today. Overall, Q3 2022 prices are higher, thanks to rising natural gas prices.

ERCOT  Real-time prices have exploded this week; 7x24 prices are averaging around $330/MWh, largely because of record peak loads and anemic wind output over last weekend and yesterday. In fact, prices flirted with the $5,000/MWh cap for three consecutive hours on Wednesday. Over the next few days and early next week, peak loads should drop by a few thousand MW while wind output should improve, so real-time prices should cool off. However, the latter part of next week looks more uncertain, for high temperatures and loads are projected to resume. This real-time volatility has rubbed off on forward prices. August peak figures are up by $80/MWh from last week, and 7x24 CY strips for 2023 and beyond are $2-$4/MWh higher.

EAST Last week’s trend has essentially carried over into this week. Index prices are in the $90s/MWh in the Midwest, $80s/MWh in NYISO, and $60s/MWh in ISO-NE. A heatwave expected to last over the weekend and next week is sure to raise prices broadly throughout the Midwest and East.

NATURAL GAS 

The The EIA reported Thursday morning that, for the week ending July 8, U.S. inventories increased by 58 Bcf, besting the anticipated addition of 53 Bcf. Total stockpiles now stand at 2,369 Bcf, down by 9.6% from a year ago and 11.9% below the five-year average for the same week.

The NYMEX futures prompt month of August settled today at $6.600/MMBtu, $0.089/MMBtu lower than yesterday’s settlement price but $0.303/MMBtu higher than last Thursday’s final price. Today’s peak of $6.898/MMBtu was $0.697/MMBtu over yesterday’s nadir, perfectly illustrating how wildly prices swing from day to day and even from hour to hour. Overseas, prices for European natural gas and North Asian LNG remain firm as the Nord Stream 1 pipeline is shut down for maintenance and rumored not to be ready to return to full operation once the planned maintenance is completed late next week. Russia has stated that it has no documentation permitting shipment of a needed turbine from Canada. Further feeding skepticism about the return of the pipeline, Russia also claims to lack parts for six compressors.