Weekly Power Outlet US - 2024 - Week 7

Nat Gas, LNG, FERC-Again, Springtime

Weekly Power Outlet US - 2024 - Week 7
Photo by Nikola Johnny Mirkovic / Unsplash

Nat Gas, LNG, FERC-Again, Springtime

Energy Market Update Week 7, brought to you by Acumen.

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a close up of a meter on a pole
Photo by Doris Morgan / Unsplash

According to technical traders, natural gas has now fallen into oversold levels for the eighth straight day. Again, the cure for lower prices is lower prices. The weekly EIA storage report showed a withdrawal of 49 Bcf for the week ending Feb 9 which was well below the estimated 71 Bcf. Given the increased production and lower withdrawal numbers, coupled with continued mild winter weather, projections are for storage to be over 30% higher than the 5-year average after the first week of March. Regardless of speculators or fundamental hedgers driving the market, it's going to be hard to see the market moving higher if that becomes fact.

a large red boat floating on top of a body of water
Photo by HS Spender / Unsplash

We have written plenty about the possible closure of the Everett LNG import terminal within Boston Harbor. As a reminder, this facility is owned by Constellation Energy to serve their 1400 MW Mystic natural gas generation plant nearby. That plant is slated to be retired by the end of the year, and with it, Constellation had planned to retire Everett as well. The closure of Everett became a big concern as the NE is pipeline constrained and counts on LNG to meet peak demands. Just last fall both FERC and NERC had sounded the alarm that the loss of the terminal could have consequences on reliability. ISO-NE for its part has also done some analysis on the closure basically saying without Everett, during a moderate winter, they should be ok if they can burn lots of fuel oil and get some imports from Canada.

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Well, as of this week, that discussion might be moved to the future. Utilities Eversource and National Grid have reached a supply agreement through Everett with Constellation for six years. This still needs the blessing of the Massachusetts Bureau of Public Utilites as both Eversource and National will be asking for rate increases as part of the supply deal. No question this will have some at FERC, NERC, and ISO-NE feeling a little more comfortable.

a judge's gavel on top of a flag
Photo by Bermix Studio / Unsplash

A couple weeks ago in the WPO we outlined how the departure of FERC Commissioner Danly would leave the commission with three votes instead of four possibly freeing up the possibility of more rulings without deadlock. Well, as the saying goes, that aged as well as milk in the hot sun. This week, Commissioner Clement announced she would not seek a second term. Her current term ends in June, but she can stay on until the Congressional session ends early next year.

Should Clement choose to leave, that would mean the FERC would no longer have a quorum to issue rulings. Given this is an election year, it's hard to see a scenario where any new appointment would be done in a timely matter leaving the back half of the year with a FERC waiting again.

man holding two white baseballs
Photo by Jose Francisco Morales / Unsplash

A couple weeks ago we reported that some Phil guy saw his shadow so apparently that means winter is almost over. Here at WPO, we like to use more scientific prognostications backed by historical data. This week, going back a hundred years, a sure sign of the impending spring is upon us......PITCHERS AND CATCHERS reported!!!!!!!!!!!!!!!!



Red signifies week over week price change down / Green signifies week over week price change up
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