Print

Weekly Energy Industry Summary

Commodity Fundamentals

Week of March 17, 2025

By The Numbers:

  • NG '25 prompt-month NYMEX settled at $4.09 per MMbtu, down $.09/MMbtu, on Monday, March 17.
  • WTI '25 prompt-month crude oil settled at $67.52 per barrel, up $.40 per barrel on Monday, March 17.

Natural Gas Fundamentals - Neutral

  • Prompt NYMEX natural gas settled at $4.02 per MMbtu, down $.09/MMbtu on Monday, March 17.
  • The soft-demand month of April is near with some potential softening in the front end of the market.
  • The weather is very seasonal, not a big anomaly, and diminishes rapidly as a market driver.
  • Natural gas storage will end up somewhere near 1.7 Tcf at the end of March. This means that year-over-year, an additional 3 bcf per day will be needed to refill storage to 3.8 Tcf by the end of October.  LNG exports are forecast to be up 2.5 to 3 Bcf per day on an annualized basis in 2025 versus last year.  Thus, the market is looking for a boost of something in the neighborhood of 7 Bcf per day of additional gas.  Given the current gas and NGL pricing action, that is well within reach for producers.  
  • Natural gas production for 2025 (year-to-date) averaged 103.6 Bcf per day versus 103.1 Bcf per day over the same period last year.
  • Electric power generation demand for gas, year-to-date, averaged 34.2 Bcf per day versus 33.9 Bcf per day for the same period last year.
  • Residential/commercial demand for gas year-to-date averaged 43.1 Bcf per day versus 37.2 Bcf per day for the same period last year.
  • LNG exports month-to-date averaged 15.2 Bcf per day versus 13.6 Bcf per day for the same period last year.
  • Overall demand for natural gas is elevated over the same period last year. Storage is materially lower than the same period last year. Production is slightly higher than the same period last year.

Crude Oil - Neutral/Bearish

  • NYMEX (WTI) prompt-month crude settled at $67.52/bbl, down $.40/bbl on Monday, March 17.
  • President Trump ordered heavy air and seaborne missile strikes taking out Houthi missile and support installations in Yemen. The Houthi's have severely disrupted shipping of goods and energy through the Suez Canal, one of the world's most important commercial sea lanes. Suez Canal traffic has dropped 50% since the Houthi attacks began last year, The IMF reports.  
  • Despite softening crude oil prices, Goldman Sachs analysts anticipate higher OPEC plus output this summer.
  • OPEC forecasts demand for crude oil to increase 1.4 million barrels per day in 2025 and 2026. That would still leave a fair amount of spare production capacity in the market over that time frame.

Economy - Neutral

  • Equities continue selling hard in the teeth of potential tariff impacts.
  • There is no question that the tariff policies of the Trump Administration are creating a lot of uncertainty in markets and this is most expressed in volatile equities markets.
  • Gold prices are rallying, cresting $3,000 per ounce.
  • On April 2, new tariffs are to take effect on Canada, Mexico, China and the European Union.
  • Inflation cooled last month with core numbers running at 2.8% year-over-year.
  • Retail sales for February posted weak results, up 0.2%.

Weather - Neutral/Bearish

  • A colder west and warmer east will flip this week, with some cooling in the east and warmer in the west. Spring is here. The broad weather pattern looks very seasonal relative to the thirty-year average.

Weekly Natural Gas Report:

 
  • Inventories of natural gas in underground storage for the week ending March 7, 2025 are 1,698 Bcf; a withdrawal of 62 Bcf was reported for the week ending March 7, 2025.
  • Gas inventories are 230 Bcf below the five-year average and 628 Bcf less than the same time last year. 
Values reflect week ending Mar. 14, 2025
Prices reflect week ending Mar. 14, 2025

Weekly Power Report:

Mid-Atlantic Electric Summary

  • The Mid-Atlantic Region’s forward power prices were higher for nearer-terms but lower for terms further-out on the price curve, over the past week.  Sharp swings in natural gas futures gave way to solid losses Monday amid a lack of near-term fundamental support spearheaded by overall mild weather and a potential early start to the injection season.  Over the past two weeks we have been in a cooler West and milder East pattern.  This starts to flip with the West warming and the East cooling as cold fronts bring some chilly days into the forecast, but not a complete flip to a sustained chilly pattern.  Future power prices for the 2025-2029 terms were relatively unchanged over the past week with slight increases and decreases throughout the strip.  Month-over-month, the front part of the price curve saw an 8% average increase while the back-end saw a -6% decline.  Month-to-date, day-ahead settlement prices in West Hub are averaging $45.62/MWh or -8% lower than February’s average, but 91% higher than last year for the same month.
  • Load growth in Dominion Energy’s (DOM) zone tied to data center demand continues to lead the PJM region.  DOM reported ~19 GW of new contracted capacity in past six months. Peak load in the region is forecasted to grow from 23.4 GW in 2025 to 42.8 GW by 2035.  The zonal clearing price in the PJM auction for 2025/26 was $444.26 MW-day.  Helping to serve the growing data center load will be DOM’s Coastal VA Offshore Wind project (2.6 GW) expected in Dec 2026.  Sources: Dominion Energy, RTO Insider.

Great Lakes Electric Summary

  • The Great Lakes Region’s forward power prices were higher for nearer-terms but lower for terms further-out on the price curve, over the past week.  Sharp swings in natural gas futures gave way to solid losses Monday amid a lack of near-term fundamental support spearheaded by overall mild weather and a potential early start to the injection season.  Over the past two weeks we have been in a cooler West and milder East pattern.  This starts to flip with the West warming and the East cooling as cold fronts bring some chilly days into the forecast, but not a complete flip to a sustained chilly pattern.  Future power prices for the 2025-2029 terms were relatively unchanged over the past week with slight increases and decreases throughout the strip.  Month-over-month, the front part of the price curve saw an 9% average increase while the back-end saw a -7% decline.  Month-to-date, day-ahead settlement prices in COMED are averaging $26.94/MWh or -31% lower than February’s average, but 64% higher than last year for the same month, while those prices in AdHub are averaging $42.22/MWh or -10% lower month-over-month but 92% higher than last year in March.  Month-to-date, day-ahead settlement prices in Michigan are averaging $39.84/MWh or -16% lower than February’s average, but 79% higher than last year, while those prices in Ameren are averaging $32.37/MWh or -28% lower month-over-month but 54% higher than last year.
  • FERC Establishes Show Cause Proceeding on Co-located Load Issues in PJM - FERC recently issued an order charting a path forward for resolving co-located load issues in PJM.  FERC concluded that PJM’s tariff may be unjust, unreasonable and unduly discriminatory because it does not contain rules for interconnected generators to follow when seeking to serve co-located load configurations.  FERC directed PJM and the PJM transmission owners to either explain why the tariff is just, reasonable and not unduly discriminatory without provisions on co-located load arrangements or identify what changes would remedy any identified concerns related co-located loads.  FERC required PJM and the PJM transmission owners to submit briefs on these issues within 30 days of the order and strongly encouraged interested parties to submit responses to PJM and the transmission owners within 30 days thereafter.  FERC asked that PJM and the transmission owners (and interested parties) respond to a lengthy set of questions (many of which include detailed sub-questions) covering a broad gamut of co-location-related questions including on whether and the extent to which co-located load takes transmission and/or other ancillary services from the grid, how the costs for any such services are or should be allocated, whether and how load can be fully isolated from the grid, whether PJM’s necessary study process for co-located load arrangements is sufficiently robust or if changes are necessary, whether PJM should also consider the impact a generator entering into a co-location arrangement may have on PJM resource adequacy overall and how any resource adequacy issues should be addressed, and how jurisdictional questions related to generator interconnections to serve co-located load should be resolved.

Northeast Energy Summary

  • On March 3, the Massachusetts Attorney General adopted new regulations which concern the prohibition of “junk fees.”  These regulations contain several provisions concerning price disclosures and automatic renewals across all industries, including electric suppliers, and become effective on September 2, 2025.  The regulations now require that a seller disclose clearly and conspicuously at the initial presentation the total price of the product, including the nature, purpose, and amount of any fees, charges, or other expenses that would be imposed on the transaction.  Additionally, the total price must be disclosed before a customer is required to provide any personal information, unless that personal information is necessary to facilitate underwriting in connection with the sale.  The regulations also target “Negative Option Feature products,” which are products where the absence of action is considered assent, such as automatic renewal products.  For these, sellers must disclose, in writing and prior to purchase, that charges will occur on a recurring basis unless the consumer cancels the service and must also include instructions on how to cancel the service.  The seller must make the cancellation process available through the same mechanism as which the sale was executed (e.g. online cancellation available for an online sale) and if the auto-renewal is longer than 31 days, the seller must provide a written notice between 30 and 5 days before the renewal with the calendar date which the consumer can cancel without further financial obligation.
  • On March 10, the New Hampshire House Science, Technology, and Energy Committee voted to recommend “Inexpedient to Legislate” (ITL) for HB 760-FN, relative to default service, along party lines.  This bill would require reconciliations for under- and over-collections for default service supply to be placed in the bypassable charges for default service customers rather than the non-bypassable charges placed on all customers, including those on competitive supply.  Additionally, many market participants advocated for amending the bill to also require the Public Utilities Commission (PUC) to design default service procurements to reduce price volatility, reduce risk to ratepayers, and protect the competitive market.  This is an important amendment, given that the PUC is requiring the electric distribution companies (EDCs) to procure increasing amounts of the default service load from the ISO-NE day-ahead market rather than through competitive solicitations.  The PUC’s plan to procure default service supply on the day-ahead market will increase volatility and customer risk, while also harming the market by creating price signals that aren’t reflective of the current electricity market.  With a committee recommendation of ITL, the bill faces a significant hurdle as the full House would need to vote to overturn the recommendation.  However, Republicans only have a slight majority in the House, so it is possible a few Republicans could break with the party to overturn the committee recommendation.  If that happens, the bill could pass and move to the Senate. 

ERCOT Energy Summary

CAISO, Desert Southwest and Pacific Northwest Energy Summary

  • The first half of March featured cool and wet conditions for California and the Southwest, a welcome change after months of anomalously dry weather. Checking this month’s high temperatures at our preferred reference point for the LA Basin, Burbank airport, it’s warmest high thus far in March was 73° on March 9th (by comparison, February had 13 days of highs > 73°). The state turns the corner on winter in lock step with the official arrival of Spring on Thursday as a strong upper-level ridge begins to build over the Western U.S., enhanced by an offshore flow from high pressure over the Great Basin. This will bring much warmer and drier weather to the region, putting Burbank in the upper 80s early next week along with Las Vegas and Phoenix likely to reach the low 90s, rivaling records. The Pacific Northwest is also expected to undergo some warming, with Seattle having highs in the 40s for most of this week but expected to top out in the low to mid 60s next week. Snow water equivalent numbers in California have improved since the beginning of the month, now up to 89% of average statewide and 105% of average in the most important northern region. The water flow outlook for the April to September period at the Dalles dam along the Columbia River is reporting 92% of average. This may be pressuring Q3 prices as they have come off in recent days, closing yesterday around $62 and $57 MWh in NP15 and SP15, respectively.
  • Heating demand will fall this week given the temperature outlook, but PG&E deserves a spotlight due to a counterintuitive low operational flow order (OFO) declared on Saturday. Healthy gas storage volumes, warming weather, and strong renewable generation all suggest a risk of high OFOs. But the low OFO this weekend appears related to low pipeline flows and the risk will increase with the upcoming maintenance at the Kingsgate transfer point. This will drop inbound capacity along the Gas Transmission Northwest (GTN) pipeline from ~3 Bcf down to ~2.6 Bcf beginning today and lasting through Friday, tightening the supply demand balance on PG&E as well as upstream in the Pacific Northwest.
  • Cooling demand is slated to pick up next week as high temperatures across the SoCal and the DSW region are expected to jump deep into late spring mode. The increase in demand will likely be offset by renewables to a degree as all three major sources see a lift; early snowmelt should lift run of river hydro flows and thus hydro generation; the strong offshore flow will boost wind output and mostly clear skies along with sunlight that stretches a couple minutes each day will drive solar production into overdrive. This trifecta has so far made a hot mess for CAISO dispatchers as they attempt to keep the system in balance during peak solar hours when excess megawatts flood the system. It’s not unusual for real time prices to settle below the $0 waterline under these conditions, but the wealth of solar overgeneration in SP15 has dragged day ahead prices well below the surface – crashing to -$64 MWh on Saturday which led to the entire 16-hour peak period settling at -$0.31 MWh. Day ahead prices for flow today (Tuesday, 3/18) in SP15 are around -$35 from 10 AM through 4 PM PPT, while the entire peak period indexed at a mere $1.61 MWh. The peak period price at NP15 settled at $39.75 representing nearly $38 of congestion charges along the Path 15 line.
  • In late February, California and Quebec released the results of the 42nd joint cap-and-trade auction of carbon allowances from both jurisdictions, and the results were not good. California’s first quarterly cap-and-trade auction of the year settled at $29.27 per ton of carbon. That’s $12.49 per ton less than at this time last year, meaning the state raised $850 million instead of $1.1 billion which is used to fund everything from wildfire mitigation to utility bill rebates to the aspirational high-speed rail. As carbon traders are getting anxious after nearly a year of weak demand, serious concern is hitting at CARB, who reminded the Legislature that the auction proceeds are dwindling. The final numbers include sales figures and settlement prices for Current Vintage (2025) and Advanced Vintage (2028).

Current Vintage

Number offered: 51,466,028

Number sold: 51,466,028

Settlement price: $29.27

Advance Vintage

Number offered: 6,847,750

Number sold: 6,847,750

Settlement price: $28.00

Stay up-to-date on the latest energy news and information:

Coming soon from Constellation Customer Insights: Help us provide you with greater service by completing our online study later this month. For a limited time, eligible customers can choose to accept an incentive for taking the time to provide feedback.

  • Energy Market Intel Webinar - Register for our next market update webinar on Wednesday, May 21 at 2 p.m. ET when the CMG team will provide insights on market factors currently affecting energy prices, such as weather, gas storage and production, and domestic and global economic conditions.
  • Fortunato & Friends Webcast - Stay tuned to Constellation communications for more information about our next Fortunato & Friends webcast!
  • Energy Terms to Know - Learn important power, gas and weather terms.
  • Sustainability Assessment - We invite you to complete a brief assessment that helps us learn where your company is in building and/or implementing a sustainability plan. Through these insights, Constellation can customize solutions to meet your needs.
  • Subscription Center - Sign up to receive updates on the latest market trends.

Questions? Please reach out to our Commodities Management Group at CMG@constellation.com.