Biden Selects Head of U.S. Energy Department
Joe Biden selects former Michigan Governor Jennifer Granholm to lead the Energy Department. With a budget of about $31 billion and a workforce of about 14,000, the Department of Energy regulates the nation’s energy portfolio, including fossil fuels and renewable sources like solar and nuclear energy. Biden wants to make clean energy a priority in his administration.
Even though there was a snowstorm in the northeast, the warmer than normal temperatures and lower demand levels across most of the rest of the country seemed to stabilize the natural gas market. The January 2021 natural gas contract is trading flat to yesterday’s close at $2.68. The January 2021 crude oil contract is up $0.28 at $48.10 and the EIA reported a withdrawal of -122, which was a little lower than expected.
Natural gas pricing plays a key role in electricity power pricing due to the increasing reliance on natural gas fired generators as nuclear, coal, and oil generation is retired and mothballed. As the marginal unit of generation, gas prices are directly correlated to power pricing (more so in some regions such as NYC vs. others such as parts of PJM). We keep an eye on natural gas market fundamentals in order to provide insights into forward power pricing for our clients. Gas production has grown and surpassed any speculation that production would not be able to keep up with demand due to LNG and Mexican exports.