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Energy Market Update: June 12, 2018

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Natural gas and electricity prices are trending up thanks to a number of risk premiums. We’ve got your up-to-date, region-by-region breakdown here.

Tune in to the video below.

Our graphics represent the fixed prices of natural gas and electricity in regions across the U.S. These prices take into account both basis and commodities pricing.

Regional Natural Gas Prices

New England Algonquin

Prices remain elevated for 2019. There have been brief dips, but the market has rallied quickly. Timing the market requires some acumen; we can offer assistance if you’re interested in buying gas or power during these dips. Oil is an important price factor in New England, and because oil prices have been high, a risk premium has been introduced into the price of gas in New England.

NY Iroquois Z2

Prices are elevated. They are subject to some of the same factors as New England.

Transco Z6 NY

Risk premium factors into higher price. Oil can be important to Transco, and the storage situation in the US is lagging behind the five-year average. Extremely high trades took place this winter in Transco Z6, which is dragging up the fixed price.

Socal Citygate

Despite the influence of renewables, capacity has been curtailed in this region, leading to a risk premium. Additionally, border maintenance has led to a risk premium here.

Tetco m3

Prices in this region have rallied since April’s lows. A risk premium persists, however, as storage has lagged and gas demand from the power sector has grown. Gas demand could continue to be high over winter for power generation.

Dominion S Pt., Chicago Citygate, Columbia TCO

Regional access to gas keeps these prices relatively low compared to other regions. Commodities, however, are still causing these prices to rally slightly since April.

Regional MW

Natural Gas is a big part of the marginal price for power. High gas prices lead to high electricity prices.

ATC New England, NYC

High gas prices in these zones are leading to high power prices.

ERCOT (Electric Reliability Council of Texas) North Zone

There has been a recent drop in price due to very low reserve margins, which is characteristic of summertime through July and August.

CAISO SP15

The price of gas is rising here, and taking power with it.

PJM West Hub

Again, prices here reflect risk premium from gas.

ATC N Illinois

Low gas prices for Dominion S Pt., Chicago City and Columbia TCO keep N Illinois prices quite low, relatively speaking.

NY ISO West

Low prices in this region are due to good access to hydro energy and inexpensive gas. So it’s no surprise that costs remain low.

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Posted: June 12, 2018

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