Volume 18, Issue 10 May 2, 2022
In this Issue
WGL Energy Gives Back on Earth Day
Editor's Note
Can US Production Respond to High Prices?
Weather
Washington, D.C. Area Cooling/Heating Degree Days
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Editor's Note
Can US Production Respond to High Prices?
Week in review for April 24 - April 30, 2022

Thursday, the U.S. Energy Information Administration (EIA) reported that working gas in storage as of Friday April 22, 2022, was 1,490 Bcf. This was an increase of 40 Bcf from the previous week, in-line with expectations. Inventories are now 405 Bcf lower than this time last year and 305 Bcf (or 17%) below the 5-year average.  

Industry estimates vary a bit but, US natural gas production appears to be remaining relatively flat despite the huge price run up in recent months. The lack of significant production increase coupled with high LNG exports (taking advantage of even higher European and Asian natural gas prices) and little US demand shifting from natural gas to other sources all contribute to the growing storage deficit and related pressure on near-term prices.

Prices were mixed for the week ending 4/28/2022 but have been swinging wildly and remain near the 5-year highs set recently. The 12-month NYMEX natural gas strip (Jun22-May23) was down 2.8% and the 12-month PJM STD 7x24 up 3.2% for the week, though power was lower for months Apr 2023 and later. Both natural gas and power prices for the near term are significantly higher than further out (Apr 2023 and beyond) as shown in the natural gas graph below. Something is likely to give as the huge spreads between near- and mid-term prices will be hard to maintain. 


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