Weekly Power Outlet US - Week 51
From frosty forecasts to a festive twist: A year of weather extremes reshapes the energy landscape. As warmer temperatures sweep in, natural gas markets respond, while global dynamics and FERC's parting insights become intriguing.
Merry Spring?, FERC Meeting, Happy Holidays
Energy Market Update Week 51, brought to you by Acumen.
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What a difference a year makes! Last year heading into the Christmas weekend, a good chunk of the country was looking at record cold temps in what would become Winter Storm Elliot. This year, any precipitation in most of the country will be rain with May shower temperatures.
EIA reported a withdrawal of 87 Bcf for the week ending December 15, which was slightly higher than the estimated 83 Bcf. Natural gas futures had an impressive rally on the news Thursday, and as of this morning, look to be holding the gain. Frankly, looking at the weather maps below, there isn't much there to give the market a reason to be bullish in the near term. That said, there are a few things happening in the worth keeping an eye on. While temps resemble early spring here in the US, China is enduring its coldest weather in 40 years. Also, with things heating up in the Red Sea, shipping routes of LNG to Europe have been lengthened by weeks as sailing is diverted from Suez to around the horn of Africa.
This week FERC held its December meeting. While the meeting was a farewell to long time Secretary Kim Bose, and Commissioner Danly, there was an interesting report regarding black start. This report was a fallout from Uri, but it's fair to assume the same issues could be attributed to Elliot last year. In the report, there is concern of the over reliance on natural gas for black start. Some of the recommendations include revamping gas scheduling and firm transport, access natural gas infrastructure during a blackout, and adding onsite or third-party storage.
As mentioned, this was Commissioner Danly's last meeting. Danly could be viewed as the antagonist of the Commission, if there is such a thing. If you follow the meetings, or their testimony in front of various committees, Danly was the most tell it like it is with little regard for nuance or placating a certain narrative. We will miss Danly, these meetings can be outright boring, but he was must see TV-if you will. All the commissioners gave a glowing farewell as expected, with Commissioner Christie summing it up best when talking about his appointment to FERC and hearing from others that there was no reason to argue with Danly, because he was almost always right.
Finally, Happy Holidays to all and season's greetings. 2023 is almost in the book and the year has flown by. We want to thank all the readers for support and look forward to 2024. Each week we try to give some commentary on electricity and what might be moving prices along with things we find interesting. Please feel free to provide feedback on what you like and/or what we are missing. Again, Thank you.
This week we are adding a couple charts to the WPO. Because On/Off Peak can diverge a fair amount, we are adding a chart of each to the around the clock chart for the trading hubs followed.
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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