Webinar Analysts: Turbulence Ahead?
During the October Constellation monthly Energy Market Intelligence Webinar, Constellation’s Commodities Management Group (CMG) discussed a warm winter outlook, recent factors influencing the economy, natural gas storage and production, and the future of natural gas in the U.S.
Chief Meteorologist Dave Ryan provided a weather outlook. All major indices are suggesting a warm winter due to expected strong El Niño, negative Pacific Decadal Oscillation (PDO) with warm ocean temperatures in the Central North Pacific and cooler than normal waters along the western coast of North America, and warmer than normal water in the Atlantic Ocean.
All Things Economic
Moving to the economy, Chief Economist Ed Fortunato continued his economic conditions discussion. He discussed how major fundamentals such as employment and oil prices are positive indicators that the economy could remain steady. On the other hand, geopolitical factors, consumer spending habits, and higher interest rates are tipping the metaphorical scale the other way.
Supply & Demand Fundamentals
Moving to natural gas supply and demand fundamentals, gas-fired power generation set a new daily record this summer in spite of high renewable output. This has led to adjustments in the EIA’s Short-Term Energy Outlook (STEO) for the storage surplus, dropping end of season forecasts to ~3.8Tcf from 4.0Tcf .
On the production side, the U.S. continues to see declining rig counts, which have shrunk by more than 40 since March. Flat production in 2023 and the declining rig counts indicate that production could see even more slowdown in 2024, as economic factors force producers to reevaluate capital spending.
The Future of Natural Gas
The team then evaluated the overall state of the natural gas market in the U.S. and some outlooks on future of the market. Natural gas continues to be the fuel of choice in the U.S. and analysts are keeping a close eye on growing LNG demand and exports, especially for countries that are coal dependent like China and India. The team also evaluated storage and pipeline infrastructure, which are quickly reaching capacity with increased demand and haven’t been upgraded since the Shale Revolution.
Market Trends and Temperature
The team concluded the webinar by looking at forward power charts, the “Market Temperature,” and other factors affecting the energy market.
We invite you to join us for our next Energy Market Intel Webinar on Wednesday, November 15th at 2 pm ET, 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.
The views, thoughts and opinions expressed in the Energy Market Intel Webinar by each participant belong solely to the author and not necessarily to the author’s employer (including Constellation Energy Corporation or any of its affiliates), organization, committee or other group or individual. Constellation does not make and expressly disclaims, any express or implied guaranty, representation or warranty regarding any opinions or statements set forth herein. Constellation shall not be responsible for any reliance upon any information, opinions, or statements contained herein or for any omission or error of fact.