Webinar Analysts: Missed Opportunities, Cold Weather and New England Winter Risks
During the November Constellation monthly Energy Market Intelligence Webinar, the commodities management group (CMG) team covered a cold winter forecast, a midterm election recap, natural gas fundamentals, and a special look into the ISONE market with a volatile winter approaching.
Chief Meteorologist Dave Ryan started the webinar by looking at cold weather moving into the U.S. A combination of blocking in Alaska, Hurricane Nicole in the Southwest Atlantic, and storms in the Pacific are forcing pattern changes that is expected to bring cold air into a majority of the lower 48. As a result, November is forecast to have higher Population Weighted Heating Degree Days (PWHDDs) than last year and the 30-year normal. Ryan predicts that the cold weather will continue, as covered in previous webinars; the third-year La Nina Correlation normally results in colder-than-normal winters. January is expected to be the coldest month across the U.S., potentially cracking the 1,000 PWHDD level.
All Things Economic
Chief Economist Ed Fortunato moved on to a brief overview of the midterm elections and potential impacts that the energy industry could face with changes in the House and Senate. Fortunato also covered the impacts of an October OPEC+ production cut and a European halt on Russian oil on U.S. stocks.
Natural Gas Fundamentals
The Commodities Management Group (CMG) experts covered natural gas fundamentals starting with gas production, as analysts have seen increased gas production to close out the year, on track to meet the EIA’s forecast for 2022. In 2023, gains could become more difficult, with pipelines nearing full capacity, and freeze-offs may tighten supplies this winter. Further concerning winter supply, while injections into natural gas storage have been closing the year-over-year deficit, current stocks are only prepared for an average winter. Europe is facing a similar situation with the current warm weather keeping storage tanks full, but the supply/demand balance is highly reliant on weather. If an extended cold streak hits, the U.S. and Europe could face price spikes and reliability issues.
New England Winter Risks
New England CMG expert, Brandon Fong, joined the webinar to discuss the precarious position New England states face this winter. With fuel delivery challenges, infrastructure limitations, and increased European demand, fewer LNG cargoes are expected come into New England this winter, which relies on LNG imports to sustain any cold spells.
Grading the Market
The CMG team finished the webinar by offering their “grades” into how the discussed market fundamentals impact energy strategies and whether to be bullish or bearish with decision-making.
We invite you to join us for our next Energy Market Intel Webinar on Wednesday, December 21st at 2pm EST, where Constellation energy experts offer detailed and timely updates on factors affecting energy prices such as weather, gas storage and production, and domestic and global economic conditions. Register by visiting www.constellation.com/marketintelwebinar.