US NATGAS: Summer 2025 ngas power demand: US coal-to-gas switching
Mar-19 15:10
- Analysis shows inflection point for coal-to-gas switching around $3.25 to $3.50 mmcf nationally, with >$11 mmcf being the max for 0 incremental gas-fired generation over coal (see charts below).
- In the US Northeast, New England and Chicago demand zones, summer 2025 prices are averaging $4.10 mmcf, implying daily incremental gas burn of +0.24 bcfd; EGT-SP production region in the Northeast summer 2025 flirting with the high end of the inflection point at $3.54 for the summer strip
- Coal-fired generation capacity greatly diminished from retirements over the past decade, and tighter y/y coal inventories are headwinds for switching and may be less impactful in summer 2025
- Trump posts yesterday on Truth Social for “opening up hundreds of all Coal Fire Power Plants” and is authorizing his Administration to “immediately begin producing Energy with BEAUTIFUL, CLEAN COAL”
- This follows last week’s roll-backs of regulations by the US Environmental Protection Agency on coal-fired power plants climate change, and electric vehicles under the Obama—era’s Clean Air Act. – AP
These new policies may have more impact on 2026 than 2025 as they are facing push back from environmental groups, and the question of how long (if at all) coal generators respond to the new regulatory environment
Tighter and wider view:
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BONDS: BTP/Bund spread is testing support
Feb-17 14:59
- The Italian BTP helps some of the recovery in EGB futures, the contract look to close the opening gap up to 120.02, while better resistance will be seen at 120.47 initially.
- The 2.50% Yield level in Bund held perfectly so far today, after it printed 2.501% high earlier.
- Despite the US out for a Bank Holiday, Volumes in Europe are quite elevated when we consider that we didn't have any notable data release for the session.
- BTP/Bund spread is now 2.7bps tighter vs ~1.9bp earlier, the spread is making another attempt at that ~106.16bps level, where it found support in December, January and also this Month.
EURIBOR: Mix Of Net Short Setting And Net Long Cover Seen On Friday
Feb-17 14:54
OI data points to a mix of net short setting and net long cover in Euribor futures on Friday. Futures settled -0.5 to -3.0 ticks through the blues, partially due to prospects of a less-onerous-than-expected US reciprocal tariff regime (announced late Thursday).
- The largest net pack OI swing was seen in the reds (-14.3k), driven by ~18.5k of net long cover in the H6 contract.
- Meanwhile, there was 20.2k of indicative net long cover seen in the M5 contract.
| 14/02/2025 | 13/02/2025 | Daily OI Change | Daily OI Change In Packs | ||
| ERH5 | 576,160 | 567,935 | +8,225 | Whites | -7,782 |
| ERM5 | 712,236 | 732,470 | -20,234 | Reds | -14,349 |
| ERU5 | 560,303 | 554,445 | +5,858 | Greens | -2,948 |
| ERZ5 | 622,006 | 623,637 | -1,631 | Blues | +3,916 |
| ERH6 | 408,117 | 426,620 | -18,503 | ||
| ERM6 | 342,190 | 340,644 | +1,546 | ||
| ERU6 | 264,633 | 266,324 | -1,691 | ||
| ERZ6 | 330,859 | 326,560 | +4,299 | ||
| ERH7 | 168,388 | 169,662 | -1,274 | ||
| ERM7 | 133,844 | 132,031 | +1,813 | ||
| ERU7 | 95,832 | 95,731 | +101 | ||
| ERZ7 | 117,781 | 121,369 | -3,588 | ||
| ERH8 | 59,824 | 59,421 | +403 | ||
| ERM8 | 46,633 | 45,587 | +1,046 | ||
| ERU8 | 33,805 | 32,037 | +1,768 | ||
| ERZ8 | 46,132 | 45,433 | +699 |
US: Senate Could Move First On Adopting Budget Resolution
Feb-17 14:44
Senate Majority Leader John Thune (R-SD) could bring the Senate Republican budget resolution to the floor this week, gaining the upper hand on strategy while the House of Representatives is on recess for the week. If adopted, the resolution would put the Senate firmly on its preferred two-bill reconciliation strategy.
- The Senate resolution provides roughly USD$300 billion in new border and defence spending, including funding to complete the US-Mexico border wall, but defers President Donald Trump's tax agenda until later in the year - a move that could risk delaying legislation to extend Trump's 2017 tax cuts until beyond the December 2025 sunset date for some provisions.
- Should Thune choose to begin procedural voting - likely starting Tuesday -, it would entail up to 50 hours of debate and a so-called 'vote-a-rama' on amendments that could drag on for hours over dozens of votes.
- House Speaker Mike Johnson (R-LA) and House Ways and Means Committee Chair Jason (R-MO) have petitioned Trump to oppose the Senate plan, however, Politico notes: "Vice President JD Vance, White House policy chief Stephen Miller and budget chief Russ Vought [are] among those favoring the Senate’s preferred two-bill approach."
- Thune said in an interview on Friday: “The House and the Senate operate differently, clearly, and we have procedural issues we have to deal with in the Senate. But … these efforts are going to, at some point — they’re going to merge.”
