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Industry News (392)

Sunday, 23 March 2014 16:05

GAS PRICES

Gas was down marginally this week, with the front end of the curve declining more than the back end.  Prompt month fell 2.5%, or $0.11 (eleven cents / mmbtu).  The curve continues to be backward dated, indicating a buying opportunity for fixed price longer term contracts.  The 12, 24, and 36 month strips were all down; with the 12 month have a greater delta in percentage change, down 2% vs. the previous week.  This week’s 12 month contract settled at $4.41 / mmbtu, the 24 month contract settled at $4.28 / mmbtu, and the 36 month contract settled at $4.26 / mmbtu.  Assuming stable market heat rates, electricity contracts should have moved in lock step with gas contracts.
 
New gas storage levels came out on March 20, for the week ending March 14. The technical 1,000 storage market was breached this past week, with measures of gas in the storage system coming in at953 Bcf , a drawdown of 48 Bcf relative to the prior week.  Before this winter’s cold weather, storage levels were consistently above 3,000.  The prior year’s report ending the same week showed 1,855 Bcf in the system, so the levels have come down almost 50% vs. the comparable period a year ago. That is a material decline and it shows the effects that cold temperatures can have on the demand of natural gas.  Current storage levels are 48% below the 5 year average.  If there was not such an abundance of shale natural gas in the ground, and readily accessible to replenish inventory levels, we would certainly be hearing more about the low storage levels in the news.

Sunday, 16 March 2014 00:03

GAS PRICES

The past week saw gas prices fall marginally, however not enough to even hint at a correction from a crazy run-up that was weather driven throughout the winter season.  Prompt month gas saw a decline last week of 4%, or $0.19 (nineteen cents / mmbtu).  April contracts start the shoulder season which brings less volatility, warmer temperatures, and weak demand.  It is a great time of the year to lock in your prices for electricity and gas, and avoid the risk associated with summer and winter price shocks.  The forward curve remains backward dated, meaning short term gas contracts are more expensive than longer dated contracts.  The 12, 24, and 36 month strips were all down; with the 12 month have a greater delta in percentage change, down 3% vs. the previous week.  This week’s 12 month contract settled at $4.50 / mmbtu, the 24 month contract settled at $4.35 / mmbtu, and the 36 month contract settled at $4.31 / mmbtu.  This all translates to higher costs to lock in your rate and protect yourself against this kind of market volatility, or higher variable rates for customer’s power and gas service.  Lesson to be learned is to lock your power and gas contract early, and protect yourself against these adverse market conditions.  Be sure to contract with a reputable supplier with the balance sheet and expertise to weather the storms in the wholesale markets, and honour their fixed price commitment to you.


New gas storage levels came out on March 13, for the week ending March 7. The data showed 1,001 Bcf of gas in the system, a drawdown of 195 Bcf relative to the prior week. Having gas storage levels close to the 1,000 mark is shocking.  Before this winter’s cold weather, storage levels were consistently above 3,000.  The prior year’s report ending the same week showed 1,959 Bcf in the system, so the levels have come down almost 50% vs. the comparable period a year ago. That is a material decline and it shows the effects that cold temperatures can have on the demand of natural gas.  Current storage levels are 46% below the 5 year average.  If there was not such an abundance of shale natural gas in the ground, and readily accessible to replenish inventory levels, we would certainly be hearing more about the low storage levels in the news.

Sunday, 09 March 2014 15:55

GAS PRICES

Last week saw flat gas markets, with warmer temperatures settling in for the deregulated markets.  Industry news however was not as bright.  The extreme cold temperatures had drastic effects on north east retail power and gas markets, with one supplier estimating losses for the winter season in the tens of millions of dollars.   While markets saw limited price volatility, they remain in a backwardated forward position, meaning near term forward rates are higher than longer dated contracts.  This week’s 12 month contract settled at $4.65 / mmbtu, the 24 month contract settled at $4.41 / mmbtu, and the 36 month contract settled at $4.34 / mmbtu.  Regional ISO’s continue to see suppliers unable to pay huge monthly settlements, and continue to evaluate shutting down insolvent retail suppliers.  The shakeout will continue to unfold, with some suppliers being consolidated and changing ownership.

New gas storage levels came out on March 6, for the week ending February 28. The data showed 1,196 Bcf of gas in the system, a drawdown of 152 Bcf relative to the prior week.  That being said, the 1,500 technical level remains breached.  Before this winter’s cold weather, storage levels were consistently above 3,000.  The prior year’s report ending the same week showed 2,104 Bcf in the system, so the levels have come down 43% vs. the comparable period a year ago. That is a material decline and it shows the effects that cold temperatures can have on the demand of natural gas.  Current storage levels remain 39% below the 5 year average.

Prompt month gas (April 2014 Contract) saw a material decline this week, down 28%, or $1.53 (one dollar and fifty three cents / mmbtu).  This was partially due to the shift in prompt month to April, representing the first month of the (Spring) shoulder season.  Shoulder season traditionally brings warmer weather, and less volatility associated with natural gas demand.  The 12, 24, and 36 month strips were all down; with the 12 month have a greater delta in percentage change, down 7% vs the previous week.  While the markets pulled back this week, they remain in a backwardated forward position, meaning near term forward rates are higher than longer dated contracts.  This week’s 12 month contract settled at $4.62 / mmbtu, the 24 month contract settled at $4.38 / mmbtu, and the 36 month contract settled at $4.29 / mmbtu.  This all translates to higher costs to lock in your rate and protect yourself against this kind of market volatility, or higher variable rates for customer’s power and gas service.  Lesson to be learned is to lock your power and gas contract early, and protect yourself against these adverse market conditions.  Be sure to contract with a reputable supplier with the balance sheet and expertise to weather the storms in the wholesale markets, and honor their fixed price commitment to you.

New gas storage levels came out on February 27, for the week ending February 21. The data showed 1,348 Bcf of gas in the system, a drawdown of 95 Bcf relative to the prior week. This drawdown was not as large as previous weeks, which implies the winter cold effect on gas demand may be starting to end.  That being said, the 1,500 technical level remains breached.  Before this winter’s cold weather, storage levels were consistently above 3,000.  The prior year’s report ending the same week showed 2,253 Bcf in the system, so the levels have come down 40% vs. the comparable period a year ago. That is a material decline and it shows the effects that cold temperatures can have on the demand of natural gas.  Current storage levels remain 34% below the 5 year average.

Saturday, 22 February 2014 15:27

GAS PRICES

We have been through another crazy week of volatility in the gas and power markets.  After spending the week in my home town of NYC (I currently reside in South Florida), I can attest to the fact that it’s cold, and there is still a ton of snow.  Demand is up for gas to heat homes, and certain parts of the country are more affected than others by inadequate infrastructure for getting readily available natural gas to the customers and power plants that need it most.  The bottle neck causes unprecedented volatility in wholesale power markets.  Prompt month gas (March Contract) shot up this week 18%, or $0.92 (92 cents / mmbtu).  The 12, 24, and 36 month strips were all up; with the 12 month have a greater percentage change of 6%.  Markets continue to look for a correction that is just not in sight anytime soon.  Customers should also take note that the spread between the near term (12 month) and longer term (2 and 3 year) has widened significantly.  Spreads between the 12, 24, and 36 month contracts continue to trend in the wrong direction (backwardation), and have widened significantly.   This week’s 12 month contract settled at $4.95 / mmbtu, the 24 month contract settled at $4.55 / mmbtu, and the 36 month contract settled at $4.41 / mmbtu.  This all translates to higher costs to lock in your rate and protect yourself against this kind of market volatility, or higher variable rates for customer’s power and gas service.  Lesson to be learned is to lock your power and gas contract early, and protect yourself against these adverse market conditions.  Be sure to contract with a reputable supplier with the balance sheet and expertise to weather the storms in the wholesale markets, and honour their fixed price commitment to you.

New gas storage levels came out on February 20, for the week ending February 14. The data showed 1,443 Bcf of gas in the system, a drawdown of 250 Bcf relative to the prior week. The 1,500 technical level has been breached.  Before this winter’s cold weather, storage levels were consistently above 3,000.  The prior year’s report ending the same week showed 2,418 Bcf in the system, so the levels have come down 40% vs. the comparable period a year ago. That is a material decline and it shows the effects that cold temperatures can have on the demand of natural gas.  Current storage levels are 34% below the 5 year average.

Saturday, 15 February 2014 15:16

GAS PRICES

Prompt month gas (March Contract) shot up this week 9%, or $0.44 (44 cents / mmbtu).  The 12, 24, and 36 month strips were all relatively flat.  There still has yet to be a meaningful correction to this current winter run-up.  Customers should also take note that the spread between the near term (12 month) and longer term (2 and 3 year) has widened significantly.  Recall that this pattern of higher short term pricing is called backwardation, a sharp contrast from the more normalized contango patters.  Contango is the more traditional look when longer term prices trend up, reflecting the storage (hold) costs over time as well as inflation.  This week’s 12 month contract settled at $4.67 / mmbtu, the 24 month contract settled at $4.40 / mmbtu, and the 36 month contract settled at $4.30 / mmbtu.  This all translates to higher costs to lock in your rate and protect yourself against this kind of market volatility, or higher variable rates for customer’s power and gas service.  Lesson to be learned is to lock your power and gas contract early, and protect yourself against these adverse market conditions.  Be sure to contract with a reputable supplier with the balance sheet and expertise to weather the storms in the wholesale markets, and honour their fixed price commitment to you.
New gas storage levels came out on February 13, for the week ending February 6. The data showed 1,686 Bcf of gas in the system, a drawdown of 237 Bcf relative to the prior week. Can gas in the system really drop below a 1,500 technical level?  If cold weather persists you bet it can.  Before this winter’s cold weather, storage levels were consistently above 3,000.  The prior year’s report ending the same week showed 2,549 Bcf in the system, so the levels have come down 34% vs. the comparable period a year ago. That is a material decline and it shows the effects that cold temperatures can have on the demand of natural gas.  Current storage levels are 27% below the 5 year average.

Saturday, 08 February 2014 17:37

GAS PRICES

While prompt month gas (March Contract) fell this week $0.17 (17 cents / mmbtu), the 12 month, 24 month, and 36 month strips were all up from $0.08 (8 cents / mmbtu) to $0.03 (3 cents / mmbtu).  The volatility and meteoric rise in the gas market caused by cold weather has yet to make a meaningful correction.  Customers should also take note that the spread between the near term (12 month) and longer term (2 and 3 year) has widened significantly.  Recall that this pattern of higher short term pricing is called backwardation, a sharp contrast from the more normalized contango patters.  Contango is the more traditional look when longer term prices trend up, reflecting the storage (hold) costs over time as well as inflation.  This week’s 12 month contract settled at $4.60 / mmbtu, the 24 month contract settled at $4.38 / mmbtu, and the 36 month contract settled at $4.29 / mmbtu.  This all translates to higher costs to lock in your rate and protect yourself against this kind of market volatility, or higher variable rates for customer’s power and gas service.  Lesson to be learned is to lock your power and gas contract early, and protect yourself against these adverse market conditions.  Be sure to contract with a reputable supplier with the balance sheet and expertise to weather the storms in the wholesale markets, and honour their fixed price commitment to you.
New gas storage levels came out on February 6, for the week ending January 31. The data showed 1,923 Bcf of gas in the system, a drawdown of 262 Bcf relative to the prior week. This drop represents another technical level (2,000) that has been broken this winter season.  Before this winter’s cold weather, storage levels were consistently above 3,000.  The prior year’s report ending the same week showed 2,701 Bcf in the system, so the levels have come down 29% vs. the comparable period a year ago. That is a material decline and it shows the effects that cold temperatures can have on the demand of natural gas.  Current storage levels are 22% below the 5 year average.

Saturday, 01 February 2014 19:32

GAS PRICES

While prompt month gas (March Contract) fell this week almost $0.25 (25 cents / mmbtu), the 12 month, 24 month, and 36 month strips were all flat.  The volatility and meteoric rise in the gas market caused by cold weather has yet to make a meaningful correction.  The forward curve continues to be backwardated, meaning near term gas contracts are more expensive than the longer term contracts.  This week’s 12 month contract settled at $4.52 / mmbtu, the 24 month contract settled at $4.33 / mmbtu, and the 36 month contract settled at $4.26 / mmbtu.  This all translates to higher costs to lock in your rate and protect yourself against this kind of market volatility, or higher variable rates for customer’s power and gas service.  Lesson to be learned is to lock your power and gas contract early, and protect yourself against these adverse market conditions.  Be sure to contract with a reputable supplier with the balance sheet and expertise to weather the storms in the wholesale markets, and honor their fixed price commitment to you.
New gas storage levels came out on January 30, for the week ending January 24. The data showed 2,193 Bcf of gas in the system, a drawdown of 230 Bcf relative to the prior week. Customers should note that storage has fallen below the 2,500 technical indicators, and even break below the 2,000 indicator by next week.  Before this winter’s cold weather, storage levels were consistently above 3,000. The prior year’s report ending the same week showed 2,830 Bcf in the system, so the levels have come down 23% vs. the comparable period a year ago. That is a material decline and it shows the effects that cold temperatures can have on the demand of natural gas.  Current storage levels are 17% below the 5 year average.

Saturday, 25 January 2014 20:34

GAS PRICES

Once again the cold weather being experienced through most of the country has not only caused chaos with airline travel, but also in the commodity markets which everyone pays for through higher electricity and gas prices.  The best way as a consumer can manage these price shocks is with a fixed price power and gas contract.  The biggest question is when to lock in your rates.  Locking in today does not make sense given the high volatility in the markets.  The window has closed if you have not taken advantage of signing up for a fixed price product yet, and customers should wait for the markets and the weather to stabilize.  If you are still on a variable price plan, you will be sure to feel the impacts in your upcoming electric bills.  On Friday January 24th, the prompt month (February 2014) contract blew through the $5.00 mark, settling at $5.18 / mmbtu.  This week say the prompt month increase more than $0.85 (85 cents), or almost 20%!  The 12 month strip this week was up $0.34 (34 cents), 24 month strip was up $0.21 (21 cents), and the 36 month strip was up $0.15 (15 cents).  Cold weather has had a particularly nasty impact in the New England markets, with natural gas being unavailable to fuel fossil power plants, and creating a supply / demand imbalance with electricity.  Market conditions have fallen into backwardation once again, meaning short term prices are higher than longer dated contracts.
New gas storage levels came out on January 23, for the week ending January 17. The data showed 2,433 Bcf of gas in the system, a drawdown of 107 Bcf relative to the prior week. Customers should note that storage has fallen below the 2,500 technical indicators. The impact of cold weather causing homes and businesses to draw down fuel in the storage systems has been significant. The prior year’s report ending the same week showed 3,021 Bcf in the system, so the levels have come down 20% vs. the comparable period a year ago. That is a material decline and it shows the effects that cold temperatures can have on the demand of natural gas.  Current storage levels are 13% below the 5 year average.

In what has become a recurring pattern for New England, shocks to the electrical system due to unavailable natural gas are having significant effects on price.  Customers choosing to rate lock their energy rates with a fixed price plan should be immune to these conditions.  Customers who stay on variable rate plans will see significant increases in the rates they pay for their residential and commercial electricity service.
Copyright 2010-13 EnergyChoiceMatters.com
 Reporting by Paul Ring • This email address is being protected from spambots. You need JavaScript enabled to view it.

According to ISO-New England, about 75 percent of the region's natural gas electrical generation capability was not running Thursday, presumably due to limited gas supply and/or high prices, Public Service Company of New Hampshire said in a news release yesterday.

Although it was unclear what amount of this offline capacity was receiving capacity payments through New England's centralized capacity market, the sheer volume of gas-fired capacity which was offline inevitably suggests that some capacity with a capacity supply obligation was offline. This further demonstrates that mandating that load pay capacity suppliers on a forward basis for capacity, under the pretense of reliability, offers load no assurance that such capacity will actually be available to generate power when needed.

PSNH said that as a result of the offline capacity, its entire electricity generation fleet was in operation this week, "to help meet a critical regional energy demand resulting from the prolonged cold snap."

"Extremely low temperatures combined with insufficient pipeline capacity to satisfy New England's increased dependence on natural gas, have prompted regional energy administrator ISO-New England to take what may be an historic measure--asking PSNH to fire up all of its larger power-generating facilities at Merrimack Station in Bow, Schiller Station in Portsmouth, and Newington Station, as well as infrequently-used combustion turbine facilities at Merrimack Station, Lost Nation (Groveton), and White Lake (Tamworth), for an extended period of time. Several of the combustion turbines are powered by aviation 'jet' fuel," PSNH said.

"When market prices for natural gas spike during times of high demand, [PSNH Vice President - Generation, William] Smagula says PSNH's facilities provide ISO-New England with a lower-cost alternative, which benefits PSNH customers," PSNH said.

"There is no question that the New England system is severely stressed at the moment," Smagula said, "but our entire fleet continues to perform well and provide great value to New Hampshire customers, by keeping the lights on and costs stable."

"PSNH is the only New England utility that still owns and operates its power generation facilities, a diverse fleet that is not dependent on natural gas. The state-regulated power plants, including biomass, coal, oil and nine hydroelectric facilities, are jointly capable of generating 1,150 megawatts of electricity to the regional grid," PSNH said.

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