Monthly Natural Gas Market Report | January 2025
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Temps falling steadily through next week; storage surplus robust – b e a r i s h
WEEKLY NYMEX FWD CURVE CHANGES – FEBRUARY IS OUR PROMPT MONTH
NYMEX
Prices rallied before the New Year in anticipation of cold temps sweeping across the country, soon to cover the Northeast and driving heating demand. FEB25, our new Prompt Month, gained 10￠ on the week, but has been coming off in electronic trading since Thursday’s settle at 3.66. Prices at TCO Pool are supported by LNG demand, while South Point traders wait to learn last week’s storage results.
STORAGE
Working gas decreased to 3,413 Bcf as of December 27th with a bearish withdrawal of only 116 bcf, increasing the cushion to the five-year average by a tenth of a point. Storage is now 154 Bcf above the 5-year average, shedding 12 bcf. This withdrawal shows inventory is not moving cycling within the historical average range– the report is bearish again.
ONE WEEK CHANGE – NYMEX and OIL
WEATHER
Jan 3-9: A cold system currently leaving the Northern Plains will sweep across the Midwest and East today and through the weekend w/highs of 10s-30s, lows of -0s to 20s, including lows of 20s-30s into North Texas and the South/Southeast. Overall, national demand increasing to Hight Jan 3-9.
领英推荐
Electric Outlook
PJM CAPACITY AUCTION FOR 2025/26 RESULTS PRICES SPIKE
On July 17th, 2024, PJM held its Capacity Auction for Planning Year 2025/26. The results were published on July 30, 2024, and the rates are significantly higher than the previous year. Rates increased by 816% for most of PJM’s footprint. The majority of PJM’s current Capacity rate is $29.50 per MW-year for 24/25 and the rate increased to $270.35 per MW-year for 25/26. The PJM Planning year runs from June 1st to May 31st.
The increase in rates was a result of 1.) increased projected load growth in PJM, 2.) decreased supply offers into the auction due to generator retirements of power plants and 3.) FERC-approved market reforms to risk modeling for reserve margins. PJM CEO Manu Ashthana stated that “The significantly higher prices in this auction confirm our supply/demand balance is tightening across the RTO. The market is sending a price signal that should incent investment in resources.” In the past year alone, supply declined by 6.6 GW of generation retiring or given notice of intent to deactivate. With supply declining, demand has been increasing and projected to increase more in the next few years due to new data centers being built across PJM’s footprint.
What does this mean for customers come June 2025? For an 80% Load Factor customer, the increase in Capacity rates represents about a $0.012 per kWh increase in cost. This translates into about $12,000 annually for a customer that uses 1,000,000 kWh per year.
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Ohio Certificates- Natural Gas: 14-343G(3) Electric: 14-780E(3)
Pennsylvania Certificates- Natural Gas: A-2016-2562535 Electric: A-2009-2108640