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December 19th - According to three sources, European Central Bank (ECB) policymakers expect to keep interest rates unchanged next year, but are not yet ready to completely rule out further rate cuts due to the still highly uncertain economic outlook. The ECB kept interest rates unchanged on Thursday and raised some of its economic growth and inflation forecasts, a move widely interpreted by investors as closing the door to further rate cuts. However, sources indicated that policymakers at the meeting had no intention of announcing the end of the easing cycle because uncertainty remains high. Nevertheless, all three sources stated that the most likely outcome is that interest rates will remain unchanged throughout 2026, consistent with market expectations. The sources said that most policymakers believe the risks to the economic growth outlook are broadly balanced, although a minority believe that actual growth may be lower than the ECBs own forecasts. There is even less disagreement on inflation, with most officials believing that inflation risks are also balanced.Goldman Sachs projects TTF natural gas prices to be €29/20 per megawatt-hour (US$10/6.85 per million British thermal units) in 2026/27. It also projects US natural gas prices to reach US$4.60/million British thermal units (MMBtu) and US$3.80/MMBtu in 2026 and 2027 respectively, sufficient to incentivize US natural gas production growth.Goldman Sachs: Oil prices are expected to rebound in the fourth quarter of 2026 as the market begins to price in renewed supply shortages in the second half of 2027 and shifts its focus to incentivizing long-cycle capacity to come online.Goldman Sachs: Iron ore spot prices are expected to fall 15% to $88 per ton by the end of 2026.Goldman Sachs: It expects aluminum prices to fall 19% from current spot prices to $2,350 per ton by the end of 2026.

This week, Texas and U.S. Plains states will break new records for energy usage

Aria Thomas

Jul 20, 2022 11:21

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Regional electric grid operators stated on Tuesday that electricity usage in Texas and other Central U.S. states is expected to set new records in the coming days as families and businesses switch on air conditioners to combat the heat.


As temperatures in the United States hit triple digits and the cost of delivering electricity rises for utility companies, grid management have begun taking steps to ensure they have the capacity to satisfy rising demand.


The United States is projected to consume a record amount of electricity in 2022, primarily because of rising economic demand and population growth in Sun Belt states served by the Electric Reliability Council of Texas (ERCOT) and the Southwest Power Pool (NASDAQ:POOL) (SPP), as well as in the U.S. Southeast.


On Tuesday, the temperature is expected to reach 111 degrees Fahrenheit (44 degrees Celsius) in Oklahoma City, making it the hottest day in a decade. On Wednesday and Thursday, the temperature in Houston will hit 100 degrees Fahrenheit (38 degrees Celsius). According to government data, the average temperature in both cities during this time of year is 94 degrees Fahrenheit (34 degrees Celsius).


On Monday, state environmental regulators granted ERCOT permission to allow power facilities to exceed the emission restrictions of their air license. ERCOT manages the system for nearly 90 percent of the state's energy usage, representing more than 26 million people.


Last week, ERCOT partially fulfilled demand by encouraging users to reduce their energy consumption in lieu of more harsh measures, such as rotating outages, to reduce consumption.


SPP, which operates the grid for over 18 million people in 17 states from North Dakota to Texas, has asked its members to postpone maintenance on critical assets including as transmission lines and power plants. In order to ensure the availability of resources during times of high demand, grid operators regularly implement this approach.


ERCOT said that Monday's preliminary power usage hit 79,039 megawatts (MW), exceeding July 12's previous high of 78,412 MW. Tuesday's power usage is forecast to hit 80,318 MW, while Wednesday's is projected to reach 81,480 MW.


On a hot summer day in Texas, one megawatt may provide electricity to over 200 homes.


Tuesday's power costs at the Dallas-serving ERCOT North Hub jumped from $144 to $220 per megawatt hour (MWh). This compares to an average of $74 for the first six months of this year, $141 for 2021, and $56 for the preceding five years (2017-2021).


Tuesday's power usage is expected to surpass the previous high of 52,028 MW established on July 15 by reaching 53,760 MW.


The severe weather is reminiscent of the February freeze of 2021, which left millions of Texans without electricity, water, and heat for days in the midst of a deadly storm, as ERCOT tried to prevent a system collapse owing to an extremely high number of generators shutting down.

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