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Wednesday May 26, 2021   
European and Asian summer forward strip prices have been in flux in recent days in reaction to headline news.  Prices posted steep losses last week when it was revealed the U.S. would not be enforcing sanctions on a Russian pipeline project designed to increase supplies to European markets.  But this week has seen some recovery as the market has settled down with realization that the project won't come online fast enough to stave off the market tightness resulting from severely depleted EU storage inventories.  While the price swings were some of the greatest moves posted in the EU and Asian forward curves in quite some time, the fact that the declines still weren't great enough to risk closing the economics to ship U.S. LNG abroad is yet another affirmation that U.S. LNG ... » read more
Tuesday May 25, 2021   
Coming out of winter the gas market took a decidedly bullish turn when it was apparent that the COVID demand destruction from one year ago was not going to carry over to this year. Power burns, exports to Mexico and LNG sendouts were higher and as a result the storage injections in the Gulf were disappointing. Week after week the EIA storage injection numbers posted under expectations. But this bullish tone changed dramatically once the calendar page was flipped to May. Henry Hub cash prices started moving back down to their largest discount to futures this spring. At face value this could be blamed on the return of nuclear capacity and a bout of mild weather. But there was a bigger factor involved. Pipeline flows from the Northeast down to the Gulf maximized out their ... » read more
Monday May 24, 2021   
The stat that stuck out to me this weekend as I was watching the morning local news was tied to the precipitation pattern as the forecast was calling for massive rains hitting the I-5 corridor on Monday.  The Saturday morning meteorologist stated that the last time the region saw a quarter-inch of rain in a single day was back on February 18th, 2021.  If you have ever lived in the Pacific Northwest, you fully understand that such a stat is next to amazing as the end of February and start of March is typically filled with heavy rains/snow depending on the temperatures.  It signifies how the region has been turned upside down in a matter of weeks as the regional hydro year has went from one of slightly below normal to that of in dire straits this spring as the region's other ... » read more
Friday May 21, 2021   
How were you introduced to the electricity industry? It can be a difficult industry to wrap your arms around. It can be hard to explain to your friends and family: Me: You can picture a barrel of oil, right? Mom: (Nods in Agreement) Me: Ok, now picture a bunch of electrons being pumped on to the grid by generators and flowing through transmission wires where they are measured at all key points on the system so you know exactly who produced what and who consumed what. Mom: (Blank Stare) Me: Ok, and when there is too much supply on the grid, the price can actually go negative. Yes, negative!!! You have to pay to produce energy and you get paid to consume it. Mom: (Blank Stare). What do you mean … what are negative prices? Me: Maybe we should head out to dinner now. The mix of ... » read more
Thursday May 20, 2021   
As we start to move out of the hot summer days and go trick or treating with our children at the end of October, the fall leaves are changing and it seems like Thanksgiving Dinner is upon us just like that.  Once we finish the big meal with family and friends (except for 2020 - pandemic), the day of wreckoning known as "Black Friday" pentrates most households as many get up early and sit in the parking lot of some big chain store to get that $99 flat-screen television special or some laptop that is deemed steeply discounted compared to its retail price.  Once in the door, consumerism is real and the shopping carts are full of Christmas gifts along with other items not necessarily on the list but who can pass up a great deal right??  Oh, do not forget about the ... » read more
Wednesday May 19, 2021   
It is that time of year where prognostications for the upcoming tropical storm season begin publishing.  The Colorado State University at Fort Collins, home of those stalwart Rams, issued its highly-anticipated annual Atlantic hurricane season outlook, as has IBM’s The Weather Company.  NOAA will release theirs later this week.  The two former entities are expecting a busier than normal tropical storm and hurricane season, which poses significant bullish risks to gas production, but nearly equal bearish risks to demand.  CSU is expecting this year to be more active than normal with 17 named storms spanning an estimated 80 days, and 4 major hurricanes spanning 9 days.  CSU is giving a 44% chance of at least one major hurricane hitting the Gulf Coast, and a ... » read more
Tuesday May 18, 2021   
Last Thursday the Center for Disease Control (CDC) made an announcement that those who have been vaccinated are able to resume indoor and outdoor activities without the need to wear a mask or social distance. Many states had already lifted such restrictions but now that the official guidance has been released a number of states, particularly in the center of the continent lifted the mandates that were imposed more than one year ago. It only took a few hours for the public to react. Over the weekend I was out on the town and most if not all people across Cincinnati had dropped the masks and were enjoying the sunshine. Sidewalk cafe's were packed and local news stories showed lots of smiling faces as communities were allowed to gather once again.  Figure 1 | The ... » read more
Monday May 17, 2021   
The power grid continues down the path of moving towards more renewables across the country and the push to retire the likes of coal, old inefficient natural gas and in some cases nuclear facilities.  In today's blog, we dissect the MISO market where there are some subtle shifts that are noteworthy as well as they lay the foundation of what is to come over the next few years as the push to retire coal is real and it is being replaced by the likes of solar and the new technology of batteries.  Figure 1 depicts the EIA-860M January Release, the red arrow in 2022 panel shows 6492 MW of coal plants planned to retire in MISO. The same arrow in Figure 2, depicting EIA-860M February release, shows a fall in these planned retirements to 6222 MW. This delta in MW can be attributed to the ... » read more
Friday May 14, 2021   
We recently discussed the increasingly serious dry conditions in both the Pacific Northwest and California towards the end of last month in our Newsletter Article “Drought(ing) the Summer……”.  Throughout the first half of May, the situation in the Pacific Northwest has only grown more extreme.  Precipitation for the entire Columbia River system for the month so far is under 50% of what we see in an average year.  Since the beginning of March, the Northwest River Forecast Center’s (NWRFC) forecasted water runoff at The Dalles for the April through July period has fallen steadily, reaching a new low since the beginning of the water year last October with Thursday’s forecast.  Let’s focus in on the Snake River Basin, where the ... » read more
Thursday May 13, 2021   
Many of you probably already receive Gary Ackerman’s newsletter, the Friday Burrito, if your employer is a member of the Western Power Trading Forum (WPTF). For those of you who don’t, it is a thorough and grounded but often humorous look at the weekly hot topics in the Western US energy markets, and we highly recommend giving it a read, even if you must land a “hot” copy from a friend. This year, a few of us analysts here at EnergyGPS have decided to have a bit of fun and really hone our guesses for the annual CAISO curtailment competition. Every year, Gary offers a cash price for anyone who can accurately predict the total quantity of renewables that will be curtailed in CAISO by the end of the year. We were in the mood for some light-hearted analytics, and we ... » read more
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