Weekly Power Outlet US - 2024 - Week 21

Electricity futures took a significant jump as natural gas continued its impressive move off the early May moves. As we've pointed out often, the cure for lower prices is lower prices. In the case of natural gas, that meant the conversation turned from storage to production. This month-long rally has been fueled by the headlines from the nation's largest producers of cuts to come amid lower prices.

Looking at the chart of July natural gas, the market ran to post EIA report of nearly $3.20 on the initial number. EIA reported 78 Bcf of gas was injected into storage versus the estimated 84 Bcf which was enough to get the initial spike. This rally quickly faded as there was a report that supply rose week over week. Some of that was imports from Canada, but the news was quickly followed up with reports that some suppliers were slowing their output cuts given recent prices. There is no question the increasing and decreasing of production is in charge of the market right now. Again, the cure for higher and lower prices is higher or lower prices...in other words, more or less production.

This week there were a couple happenings in the LNG industry that didn't get a lot of attention, but were certainly on interest. Golden Pass lead contractor Zachary Holdings filed for Chapter 11 bankruptcy and said it plans to leave the project. As shown in the EIA chart below, Golden Pass is expected to come online in 2025 with a fairly large footprint in the expansion of LNG export capacity. At this point there hasn't been a timeframe or significance of any delay.

Also, according to The Japan Times, Japan's top generator (Jera) announced it might switch some of its purchases of LNG from Australia to the Middle East or the United States. Australia accounts for 40% of all energy imports by Japan, including LNG. At issue, Australia has passed new greenhouse gas reduction laws that will require higher costs for LNG facilities that will have to be passed along to customers. These costs may be enough to push some of the LNG purchases to the US. The US, Qatar, and Australia are the top three LNG producers in the world.

This weekend those of us in the US will be celebrating Memorial Day. There will be picnics, family outings, sporting events, and even the retail sales in the name of the weekend.

According to the US Memorial Day website, Memorial Day, originally called Decoration Day, is a day of remembrance for those who have died in service of the United States of America. The origins of the day go back to the 1800s, but the Congressional passage of the National Holiday Act of 1971 made it official that we observe the last Monday of May.

Enjoy, and remember.

NOAA WEATHER FORECAST

DAY-AHEAD LMP PRICING & SELECT FUTURES

RTO ATC, PEAK, & OFF-PEAK CALENDAR STRIP

DAILY RTO LOAD PROFILES

COMMODITIES PRICING

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