NUS Consulting Group

01/06/2022

It is a new year - no better was to start out than reading NUS Consulting Group's US Weekly Power Market Update! If you need more information about the US power or gas markets - contact us at https://buff.ly/2YUBALw

10/28/2021

For the week ending 22 October, US EIA reported an injection of 87 Bcf into storage (our estimate for Bloomberg’s survey was 89 Bcf). Total working gas now sits at 3,548 Bcf, a deficit of 403 Bcf to last year and only 126 below the five-year average. Production continues to show no signs of increasing with a daily average of 92.4 Bcf/d last week. November NYMEX contract settled at $6.202/MMBtu on Wednesday, the highest settlement price for that month since 2009. The NUS model shows daily supply/demand imbalances beginning to tighten as cooler temperatures move in for the first week of November – a sure sign that we’re close to the end of “injection season.” Our model is trending towards a mid-50’s to low-60’s injection for next week which will push inventories above 3,600 Bcf. For more information about the natural gas markets and our price forecasts contact us at - https://buff.ly/2YUBALw

10/28/2021

According to the Bureau of Economic Analysis (BEA), US 3rd quarter GDP increased at an annual rate of 2.0% - far below expectation. The disappointing figure was the result of the spread of Delta, waning government stimulus, and supply chain problems. Put this report together with China's slowing economy and this signals trouble for global energy demand growth.

10/14/2021

For the week ending 8 October, EIA reported an injection of 81 Bcf into underground storage (NUS estimated a 97 Bcf injection and the market expectation was an injection larger than 90 Bcf.) Inventory levels are now at 3,369 Bcf which is 501 Bcf less than the same week last year but only 174 Bcf below the five-year average. Daily production was down slightly to 92.9 Bcf/d compared to 93.4 Bcf/d the previous week. Bullish speculative traders, who had been notably absent over the last six trading sessions, used the bearish injection news to drive the winter-strip contracts (Nov21 to Mar22) up around 5% as of 11:30am Eastern. NUS estimates that between 75 and 85 Bcf will be injected into storage for the week ending 15 October, which would push inventories over 3,400 Bcf with roughly four weeks left of injection season remaining. For more information about the natural gas markets contact us at - https://buff.ly/2YUBALw

10/08/2021

Front month TTF contract (Nov) for European nat gas continue to sell off. Gas is now trading below €90/MWh, after hitting an intraday peak of €160 earlier in the week. The chart pattern is starting to look like a blow-off top, with marginal buyers at these levels getting harder to find. See our Research Note released 29 September for our analysis of the market. For support navigating this volatile markets contact us at - https://buff.ly/2YUBALw

10/07/2021

For the week ending 1 October, US EIA reported an injection of 118 Bcf into storage (our estimate for Bloomberg’s survey was 112 Bcf). Total working gas now sits at 3,288 which is a deficit of 532 to last year and only 176 below the five-year average. Daily production rose 0.9 Bcf/d during the reporting week to average 93.4 Bcf/d – a 4.8 Bcf/d increase versus last year. Also notably improved versus last year is daily demand, which averaged 66.37 Bcf/d last week compared to 69.24 Bcf/d in 2020. Above-average warm weather throughout most of the US has limited residential and power-burn demand so far and near-term forecasts anticipate October to finish as the 2nd warmest on record, which should encourage further inventory growth as injection season comes to a close. On the whole, market bulls should be very careful in the coming weeks.

10/06/2021

European nat gas prices (TTF front month) started the day at €125/MWh, peaked intraday at €160+, and now are struggling to hold the €100 level. Could this be the blow-off peak that ends the recent speculative bubble? The next few trading days will be very important to confirm or reject this theory.

09/26/2021

The list from Ofgem's website of the energy suppliers that halted trading in 2021. The list includes 9 supplier and covers approximately 2m domestic and thousands of non-domestic supplies. While low price offers always sound good - vetting a supplier for financial soundness and back-office administration is also vital. Unfortunately, it looks like we are set to experience more supplier failures in the coming weeks. Any non-domestic customers requiring support can contact NUS at - https://buff.ly/2YUBALw

09/24/2021

For the week ending 17 September, US EIA reported an injection of 76 Bcf into storage (our estimate for Bloomberg’s survey was 75 Bcf). Daily production during the reporting week rose to an average of 92.1 Bcf/d – an increase of 0.5 Bcf/d versus the prior week. Production in the Gulf of Mexico continues to return slowly, with roughly 20% of available supply still shut in three weeks after offshore producers pulled personnel ahead of Hurricane Ida. Pricing for the front-month October contract as well as the winter strip (November 2021 to March 2022) contracts have taken a tumble as seasonal temperatures moved into the US over the weekend. An early run of the NUS model for storage injections/withdrawals shows working gas stocks growing by 75-82 Bcf for the week ending 9/24, which would push supplies well over 3,100 Bcf for the last reporting week in September. For more information about the natural gas markets contact us at - https://buff.ly/2YUBALw

09/21/2021

For the week ending 10 September, US crude oil inventories fell 6.4m to 417.4m. The decline was predominately driven by a drop in GOM production caused by Hurricane Ira. At present, US crude inventories are 25% below last year's (COVID impacted) level but in line with 2019. We will be watching this week's EIA release closely to see how much of the GOM crude production come back online.

09/16/2021

For the week ending 10 September, EIA reported an injection of 83 Bcf into storage (our Bloomberg estimate for the weekly survey was 76 Bcf ). The average daily dry production remained flat week-over-week at 91.6 Bcf/d. Total inventories are now at 3,006 Bcf, a deficit of 595 Bcf to levels at the same time last year and 231 Bcf to the 5-year average. Ahead of the release of today’s report the near-term October and winter strip (November 2021 to March 2022) contracts opened down from yesterday’s highs, the first sell-off seen in over a week. Bullish day traders, likely piggybacking on news of gas-fired power generators having to compensate for offline electricity supply in the UK (https://buff.ly/3tKX5id), were able to settle those same contracts over $0.20 higher yesterday, so today’s large price movement lower could potentially signal the beginning of a “blow-off top” scenario. Consumers with exposure to CY22 strip might consider temporarily holding on locking prices to see if downward momentum will continue. If you would like to gain more information about our forecast for the gas market, set up a short 15 minute meeting at - https://buff.ly/2YUBALw

Fire at UK-France electricity subsea cable sparks new price surge. Interconnector is likely to be out of commission for at least four weeks, French operator...

09/15/2021

US natural gas prices have exploded multi-year highs in apparent sympathy with European markets suffering from a lack of Russian supply and low inventory levels. US LNG exports are capped (at 11 bcf/d) due to available infrastructure and thus can be of limited help to other markets. It is difficult to understand why US markets are climbing as domestic inventory continues to build.