The Kobiona Monitor

Volume 3 / Number 10 October 29, 2021

Kobiona’s leadership has enlisted the help of our Market Intelligence Desk to craft this monthly publication to share major market dynamics impacting future power and gas prices. As every client’s situation is unique, we encourage you to review market movements with us to decide whether any action on your part could serve to lower your future costs or avoid known, coming increases.

NOAA Releases Winter 21/22 Forecast On October 21st NOAA, the National Oceanic and Atmospheric Administration, released its forecast for Winter 21/22. With a second La Nina winter in a row on deck, NOAA anticipates:


  • Warmer-than-average conditions are most likely across the Southern tier of the U.S. and much of the Eastern U.S. with the greatest likelihood of above-average temperatures in the Southeast.
  • Below-average temperatures are favored for southeast Alaska and the Pacific Northwest eastward to the northern Plains.
  • The Upper Mississippi Valley and small areas of the Great Lakes have equal chances for below-, near- or above-average temperatures.

Image of USA temperatures for 2021


  • The Pacific Northwest, northern Rockies, Great Lakes and parts of the Ohio Valley and western Alaska have the greatest chances for wetter-than-average conditions.
  • Drier-than-average conditions are favored in south-central Alaska, southern California, the Southwest, and the Southeast.
  • The forecast for the remainder of the U.S. shows equal chances for below-, near- or above-average precipitation during winter months.


  • Widespread severe to exceptional drought continues to dominate the western half of the continental U.S., Northern Plains, and the Missouri River Basin.
  • Drought conditions are forecast to persist and develop in the Southwest and Southern Plains.
  • The Pacific Northwest, northern California, the upper Midwest, and Hawaii are most likely to experience drought improvement.

Farmer’s Almanac If it sounded a little to you, like it did to us, that NOAA might be giving the East Coast a bit a break, we didn’t get the same impression from our friends at the Farmer’s Almanac who are predicting a “Frosty, Flip-Flop Winter” including a “winter whopper” for the East Coast in February.

Graph of 2021 / 2022 Winter Outlook

Natural Gas Keeps Flirting with $6.50 Prompt natural gas has made a run for $6.50/MMBTU a few times in recent weeks and not crossed the hurdle. On market close of 10/26, November was trading at $5.90/MMBTU. Most analysts agree, over the long haul, when gas is trading at or below $3, it’s a signal the market is over-supplied. Between $3-5/MMBTU, markets are finding equilibrium. When gas climbs over $6, it takes only a modest event (a bad storm – anywhere – like Europe, or another political scuffle with Russia) for gas to quickly race up to over $10. We could very easily see this occur this winter based on where fundamentals around the world now sit — especially with the reliance of Asia, Europe and New England all on LNG.

Graph of Natural Gas stock price

Strong Injections Don’t Calm ‘Winter Jitters’ Even though the last few natural gas injections of the season came in stronger than the market anticipated, power and gas futures have continued to rise. As of Thursday, October 21st, U.S. natural gas inventories stood at 3,461 BCF, 151 BCF (4.2%) below the 5-year average and 458 BCF (11.7%) below last year’s levels the same week. EXTRA CREDIT: Loyal readers of The Monitor should stop here and ask, “Wait… in late 2019 we were roughly in the same spot for U.S. natural gas storage and future power prices for all terms were trading within 10% of 5-year minimums. Future power prices are 130% above 5-year minimums now. What’s the deal?!” The next section has your answer!

Graph of working gas in underground storage

The LNG Factor We’ve called this one out countless times but this variable is becoming more to “blame” than ever for the distance between actual supplies in the U.S. and where future gas and power prices are trading. We work with all the top suppliers in the U.S. but we really like Constellation Energy’s Commodities Manager Brandon Fong’s explanation of how the situation, so we are going to let you listen to him for a change. While you are welcome to watch the entire webinar, scoot to minutes 39:28 – 54:30 to understand the Asia/Europe/New England LNG dynamic.

Source: Constellation

Questions? For those tasked with procuring power and gas for the first time — or the tenth time — the industry can seem overwhelming with densely-technical and sometimes conflicting information. We welcome your questions on how to apply our observations, as well as your feedback on The Kobiona Monitor. Please share how we can make this publication more useful by calling us on 844-209-7972, or contacting us via email,