Volume 18, Issue 10 May 17, 2022
In this Issue
Editor's Note
Prices “Ease” From New Highs
Energy Market Charts
Feature
Energy Saving Ideas for Commercial Buildings
Weather
Washington, D.C. Area Cooling/Heating Degree Days
Editor's Note
Prices “Ease” From New Highs
Week in review for May 8 - 14, 2022

In a sign of the times, this week it was reported that inflation “eased” to 8.3% annual rate in April. While it was down slightly from the previous month, it was still almost 2 full percentage points higher than it had been at any time from 1984 through October 2021 as illustrated in the first chart below. Somewhat similarly, energy prices “eased” this week but remain much higher than recent averages after screaming to new highs last week. For example, Cal 2023 NYMEX Natural Gas was down 8% this week but remains 50% higher than it had been at any time prior to October 2021.

For yet another week, prices have been swinging wildly and remain near the 5-year highs. Falling even further than the Cal 2023 strip mentioned above, the prompt 12-month NYMEX natural gas strip (Jun22-May23) was down 10.7% and the 12-month PJM STD 7x24 down 18.0% for the week. As has been the case since the near-term run up began in 2021, both natural gas and power prices for the near term are significantly higher than further out (Apr 2023 and beyond) with the discount for Natural Gas in years 2024-2026 versus 2023 still at $1.25/MMBtu after reaching over $1.50/MMBtu last week (see second chart below).

Thursday, the U.S. Energy Information Administration (EIA) reported that working gas in storage as of Friday May 6, 2022, was 1,643 Bcf. This was an increase of 76 Bcf from the previous week, a bit lower than expectations as it appears US production is still unable to ramp up significantly in the face of the very high prices. Inventories are now 376 Bcf lower than the same time as last, and 312 Bcf below the 5-year average.