보기: Market Movers Americas, Feb. 7-11: Benchmark Argo drops to 10-month low; hydro forecasts strong

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This week, a benchmark ethanol price drops to a 10-month low; ERCOT may get a performance review at a Texas PUC meeting; hydropower forecasts remain strong despite lower snowpack; bitter cold continues to drive natural gas storage pulls and prices; and a Washington summit focuses on European gas-supply concerns.

Starting with US ethanol, continued inventory increases and lackluster demand in recent weeks have pulled the benchmark Chicago Argo ethanol price to a 10-month low, with little support seen on the horizon. Energy Information Administration data showed total US ethanol stocks rose 1.38 million barrels in the week ended Jan. 28. The data also showed that Midwest inventories added 400,000 barrels to reach a record-high 10.51 million barrels Feb. 2. Most of the nation's ethanol plants are in the Midwest, as well as the key trading hub of Chicago where Kinder Morgan's Argo terminal is located. With ethanol values slipping below $2 per gallon for the first time since April 2021, traders see pressure for the foreseeable future until blending demand increases and inventories decline.

The Public Utility Commission of Texas is set to meet Feb. 10 and is likely to review the performance of the Electric Reliability Council of Texas in terms of reliability and market results. The outcome may indicate how vigorously commissioners wish to pursue further reforms that were proposed after the winter storm of mid-February 2021, which left about 4 million customers in the dark, some for days. The direction that regulators signal could enhance certainty for investors contemplating final investment decisions for generation construction in ERCOT. Power forwards prices would weaken if such decisions result in more power supply.

Hydro supply forecasts remain strong across the Pacific Northwest, despite a drop in snowpack levels in recent weeks. The Dalles Dam water supply, which serves as the barometer for hydro conditions in the region, is forecast at 100% of normal for the April through September forecast period, down from the 106%-of-normal levels seen in early January.

Bitter cold weather continues to bite the Lower-48 states and Canada, driving maximum daily withdrawals from natural gas storage and opening the deficit to the five-year average as marketers take advantage of strong AECO spot prices. AECO's balance-of-month contract traded at $4.25 per MMBtu Feb. 4, above the $3.40 per MMBtu average in the second half of January.

The US-EU Energy Council plans to meet in Washington this week to discuss European gas supply. The Biden administration has sought to secure additional LNG cargoes for Europe in the event Russian flows are disrupted by Russia's conflict with Ukraine. The meeting coincides with a visit by German Chancellor Olaf Scholz, with the primary focus of that meeting likely being potential sanctions against the Nord Stream 2 gas pipeline.

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