June is the new prompt month

Key Trends in Energy Markets - April 29, 2024

As June steps into the role of the prompt month, we’re witnessing notable dynamics in the energy markets, underscored by strong performance indicators and strategic insights:

NYMEX Natural Gas Overview:

Current Pricing: Today's trading opened at $1.92/MMBtu, peaking at $2.03 and dipping to a low of $1.91, with the current rate at $2.02/MMBtu.

Trends: NYMEX prices have softened, showing a decline of about $0.15 from last week and a more significant drop of $0.60 compared to last year.

Forecast: The estimates for NYMEX for the coming years are $2.45 for 2024, rising steadily to $3.99 by 2026.

Comparison: The monthly average for 2023 stands at $2.743/MMBtu, down from $6.64 in 2022 and $3.84 in 2021.

Market Positioning: Currently, prices are above the 50-day ($1.75), 20-day ($1.77), and 9-day ($1.74) averages.

Basis and Pricing:

Basis Movements: Both PG&E CG and SoCal CG Basis are trending upwards today.

Price Indicators: Resistance starts at $2.00/MMBtu, with support levels beginning at $1.80 and $1.75/MMBtu.

LNG and Natural Gas Exports:

LNG Exports: Stand at 11.5 billion cubic feet (Bcf).

Mexico Exports: Recorded at 6.3Bcf.

Canadian Imports: Currently 5.5Bcf.

Supply and Demand:

Supply Dynamics: Today’s estimated supply is 104.6Bcf, with a seven-day average slightly higher at 104.88Bcf.

Demand Insights: Today’s estimated demand is 92.6Bcf, with recent averages at 94.38Bcf.

Storage and Rig Count:

Storage Levels: We are currently 439Bcf above last year and 655Bcf over the 5-year average.

Rig Activity: The total rig count decreased by 6 last week, with natural gas rigs down to 105.

Weather Forecast:

The weather outlook remains bullish from the 5 to the 15-day forecast and extends into the 3-month summer projection, suggesting elevated cooling demands.

Crude Oil and Power Pricing:

Crude Oil: Rapid sell-offs have occurred due to easing geopolitical tensions, with current prices at $83.78/barrel.

CAISO Power Pricing: Moves up slightly, now just over $25 per MWh.

Carbon Offsets:

Offerings range from as low as $1 per unit to $375 per unit, providing a wide range of options for carbon footprint management.

Bottom Line:

With NYMEX and Basis indicators on the rise with weather and looming cooling demand giving support to higher prices today. Keep an eye on the market as these trends offer significant implications for pricing and energy strategy in the coming months.