Key Drivers Highest U.S. Natural gas production since 2019 Lower domestic energy demand in the Fall season Electric demand destruction in FL from Hurricane Ian Sizable U.S. natural gas storage deficit reduction expected in October End of Season storage will still likely trail 5 year storage average and 2021 La Nino this coming winter for 3rd year in a row Weak Polar Vortex forming meaning some very cold winter weather at times for the eastern

Key Drivers July was extremely hot this summer in the U.S. – very high consumption of NG in power generation U.S Natural gas storage deficit heading in the wrong direction.  Looking to be the lowest deficit in many years. U.S. natural gas production is slowly increasing – will higher volumes hit the market before winter? There are fewer speculative traders having a financial appetite at these high prices making price volatility even worse    Commentary

Key Drivers Explosion at the Freeport LNG exporting facility in Texas The news that the repairs on the Freeport facility will take 90 days instead of 3 weeks Higher than expected weekly storage injections since the LNG facility was shut down 2 bcf/day of natural gas staying home in the US instead of being shipped to Europe and Asia The severe storage deficit in the U.S. is no longer severe due to higher storage injections

Key Drivers  Hot May Temperatures Summer expected to average above normal temperatures Natural gas storage 300 bcf behind 5 year average U.S. end of summer storage level expected to be near 3.4 TCF versus being full around 3.9 TCF    Commentary June natural gas NYMEX traded strongly above $9.00 before settling at $8.908/MMBTU. Natural gas prices continue to stay volatile with some strong bullish fundamentals leading the charge higher.  May is starting the Spring/Summer season

Key Drivers  Natural gas demand flips from heating to cooling with higher temperatures in Texas Long Speculators are squeezing the wholesale natural gas and electric markets up too much Natural gas drilling ramping up, but the first deliveries will be 2022 Q4 or 2023 Q1 Will the natural gas storage deficit grow this summer? Very strong LNG exports continue    Commentary In late April natural gas NYMEX settled for May at $7.267/MMBTU. The highest since

Key Drivers Revised cooler April temperature outlooks add much more natural gas consumption End of 2022 winter NG storage is at a 19.7% deficit vs 2021 and 14.7 deficit vs the past 5 year average Near record level of LNG exports to Europe and Asia U.S. natural gas production is below pre-COVID 19 March 2020 levels Multiple LNG projects beginning construction adding up to 10 bcf/day export demand by 2025   Commentary April 2022 NYMEX settled

Electric and natural gas prices should probably be somewhat lower than they are right now, but higher oil prices are keeping them not only propped up but climbing.  Natural gas NYMEX this morning is over $5.00/MMBTU.  Even with the strong supply and demand balance of natural gas domestically and globally, natural gas prices fundamentally should be around $4.25/MMBTU.  Because electric prices mostly parallel natural gas prices, electric prices are at historical levels as well.  It’s

Key Drivers Ukraine War adding uncertainty and volatility Higher oil prices keeping short-term natural gas prices supported Higher oil prices stimulating oil and natural gas drilling Warming temperatures in March as the worst of winter is behind us Commentary Global and domestic natural gas supplies initially dropped substantially in early 2020 due in large part to lower oil and natural gas production after COVID-19 hit.  The drop in natural gas production has never come close

Key Drivers Will January through March temperatures in the Midwest and Northeast trend warm or cold? Will LNG deliveries to Europe and Asia continue at a near record pace for all of 2022? How much natural gas production in the Southwest is lost to winter freeze-offs? Will natural gas producers increase drilling in 2022 above 2020 and 2021 levels?   Commentary Would You Rather Listen to the Commentary?   Try our new Podcast! December NYMEX settled at

Key Drivers Brutally cold January Cold hanging on at least through mid-February Well freeze offs in the south Strong LNG exports Rapidly declining natural gas storage levels Technical short-squeeze + fundamental strength   Commentary Would You Rather Listen to the Commentary?   Try our new Podcast! While the majority of businesses have electric and natural gas fixed prices this winter, there are still a lot of large energy consumers buying at least a portion of their

    Key Drivers Above normal temperature forecasts for the first week of December New higher LNG record exports in November to Europe and Asia Highest coal prices in over a decade Colder temperatures and possible snowstorm in week 2 of December Commentary Fact: Natural gas is the key driver of electric prices.   False: The two run 100% parallel with each other. Historically natural gas prices and electric prices run in tandem at a 80

  Key Drivers Weather forecasts – revised colder and warmer almost daily Dutch TTF gas futures for Europe and Asia trading 5X higher than U.S prices LNG exports to Europe and Asia 2021 rebound of U.S. natural gas production – moderate Commentary FACTS:  Natural gas prices and therefore electric prices have jumped 200% since the end of 2020, which is over 350% since the 2020 NYMEX low point in July 2020.  We also know that

  Key Wholesale Energy Market Drivers Natural Gas prices in Europe and Asian are trading 7X greater than U.S. U.S. Natural Gas storage deficit versus 2020 is at 500 BCF October 2021 will likely be the warmest October on record in the U.S. adding extra cooling demand Commentary  The average natural gas NYMEX price for all of 2020 was $2.077/MMBTU.  Natural gas prices for October 2021 delivery closed at $5.841/MMBTU.  Prices in Europe and Asia

Electric & Natural Gas Prices Surging Over 250% Businesses’ that paid $.33/ccf last winter could be paying $.73/ccf this winter.   Manufacturers who were quoted fixed rates at .037/kWh for multiple terms earlier this year will be seeing rates around $.047/kWh  Commentary  Natural Gas NYMEX is rising fast and furious.  September NYMEX settled for the month at $4.37/MMBTU in late August.  This was the second highest settlement price since December 2018 and the 4th highest since

  Key Wholesale Energy Market Drivers Natural gas U.S. storage deficit continues to grow week after week Hurricane Ida plows through Gulf area shutting down production Onshore processing plants possibly lose power for weeks Will U.S. natural gas storage deficit grow beyond expected 500 bcf shortfall Electric cooling degree day drops substantially beginning Sept in high power consuming NE   Commentary  Hurricane Ida staggered the energy markets with quite the punch, but achieved no knockout.  Nearly

  Key Drivers U.S. Storage inventories are 302 bcf behind 2020 levels European natural gas inventories ended the winter at a very concerning 11% below their 5 year average European natural gas (NG) prices have shot up making U.S. LNG exports to Europe even more profitable LNG export demand is currently 11.5 bcf/day vs 4.5 bcf/day during the summer of 2020 In April speculator NG NYMEX traders lowered their short positions as they wait for new