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Industry News (392)

Saturday, 12 October 2013 14:40

GAS PRICES

Lots of volatility this past week in the market caused by colder temperatures in markets open for choice.  The prompt month was up $0.27 cents, or 8%.  The 12, 24, and 36 month strips all saw increases between 6% and 4% respectively.  The week ended with the 12, 24, and 36 month spreads were all off around 25% from the prior week’s.  This represents a buying opportunity for locking rates in over longer periods of time to protect against future far term movement in the curve.  The $4.00 level has been hit which could mean that there is a risk that markets may run away, or there could be a correction to the downside from this week’s run up.

 New gas storage levels came out on October 10, for the week ending October 4. The data showed 3,577 Bcf of gas in the system, up 90 Bcf from the previous week, or up 3%.  The prior year’s report ending the same week showed 3,715 Bcf in the system, so the levels have come down 3.7% vs. the comparable period a year ago.  That being said, present gas in the system is at around the 5 year average of 3,522 Bcf.

If one looks at the charts for Cal 12, the 12, 24, and 36 month strips were around the same $4.00 mark, however the market experienced a lot of volatility in the winter season.  With colder weather making a significant impact on the market this past week, customers should see this as an opportunity to lock in their rates for the winter season with a 6 month fixed price product.  Customers who do not wish to pay a premium for the lock can elect to float with a variable price product, opting to accept the risk of higher prices due to increased heating demand.

Big swings in the natural gas futures market over the past two days driven by colder than expected weather in key markets. Higher volatility translates to higher risk, higher short term electricity and natural gas prices. Protect yourself from these price increases by locking in your rates today!

http://online.wsj.com/article/SB10001424052702304441404579123732542001054.html

Saturday, 05 October 2013 15:15

GAS PRICES

This week had more down days than up days for the natural gas futures market.  The week ended with the 12, 24, and 36 month strips all off around 2% from the prior week’s close.  Continued dysfunction in Washington does not appear to be having an effect on the market.  Weather has largely been in check; however Tropical Storm Karen continues to circulate in the Gulf of Mexico.  Based on the current path, states open for Choice should be largely unaffected.  The battle of the debt ceiling is an event that has the potential of causing the most volatility in power and gas markets, so customers should monitor those events and choose whether or not to lock their rates accordingly.  The markets continue to test the $4.00 level, but again falling short of it.  Spreads between the 12, 24, and 36 month strips were unchanged from last week.

New gas storage levels came out on October 3, for the week ending September  27. The data showed 3,487 Bcf of gas in the system, up 101 Bcf from the previous week, or up 3%.  The prior year’s report ending the same week showed 3,642 Bcf in the system, so the levels have come down 4.5% vs. the comparable period a year ago.  That being said, present gas in the system is at around the 5 year average of 3,438 Bcf.

Customers looking for price protection should elect to lock their rates with a 6 month fixed price product.  Those customers seeking the flexibility of short term contracts, and being able to participate in the benefits of lower index pricing should elect to go with a variable price product.

Saturday, 28 September 2013 15:01

GAS PRICES

The early part of this week saw declines across the board for the natural gas futures market.  Following Thursday morning's storage report, the week gave back those earlier losses to end relatively flat.  The potential of a government shut-down in Washington continues to give the market uncertainty as weather and international events were not material drivers this week.  The markets continue to test the $4.00 level, but again falling short of it.  Spreads between the 12, 24, and 36 month strips were unchanged from last week.

New gas storage levels came out on Sept 26 for the week ending Sept 20. The data showed 3,386 Bcf of gas in the system, up 87 Bcf from the previous week, or up 3%.  The prior year’s report ending the same week showed 3,565 Bcf in the system, so the levels have come down 5% vs the comparable period a year ago.  That being said, present gas in the system is at around the 5 year average of 3,356 Bcf.

Customers looking for price protection should elect to lock their rates with a 6 month fixed price product.  Those customers seeking the flexibility of short term contracts, and being able to participate in the benefits of lower index pricing should elect to go with a variable price product.

Saturday, 21 September 2013 14:24

GAS PRICES

The natural gas futures market for the week ending Sept 20 continued to show stability, with fall weather temperatures, no big changes to the demand or supply side, and a calm geopolitical week.  The markets continue to test the $4.00 level, but again falling short of it.  The week began with steady increases in the prompt month before retreating on Friday to $3.687.  We shall see how the division in congress affects the power and gas markets going forward.  Spreads between the 12, 24, and 36 month strips were unchanged from last week.

New gas storage levels came out on Sept 19 for the week ending Sept 13. The data showed 3,299 Bcf of gas in the system, up 46 Bcf from the previous week, or up 1%.  The prior year’s report ending the same week showed 3,486 Bcf in the system, so the levels have come down 5% vs the comparable period a year ago.  The being said, present gas in the system is at around the 5 year average of 3,281 Bcf.

Customers looking for price protection should elect to lock their rates with a 6 month fixed price product.  Those customers seeking the flexibility of short term contracts, and being able to participate in the benefits of lower index pricing should elect to go with a variable price product.

Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Karen Abbott • This email address is being protected from spambots. You need JavaScript enabled to view it.

The Retail Energy Supply Association, and a group of sixteen end users, in separate letters, have urged Indiana lawmakers to pursue an evaluation of retail electric choice.

As previously reported, legislation this spring urged the legislative council to assign to the regulatory flexibility committee the topic of electric customer choice programs. The regulatory flexibility committee is currently engaged in this review of electric choice.

In a letter to the committee, RESA said, "RESA encourages the Committee to carefully consider and engage in further examination to see how electric industry restructuring and the introduction of competition will help the State of Indiana meet its future energy needs. RESA respectfully requests that the Committee recommend to the entire Legislature that legislation be considered resulting in the restructuring of the electric industry so that all customers are afforded the right to choose their electric supplier."

"If the Committee does not feel like it has enough information to make such a recommendation, RESA recommends that the Committee should initiate a broad investigation into the potential benefits associated with electric industry restructuring," RESA said.

The sixteen customers also urged the committee, in its report to lawmakers, to recommended, "a comprehensive study on the benefits of electric restructuring."

The customers cited the $1.5 billion cost overrun for the Duke Energy Edwardsport plant as supporting the need to transfer risks from customers to private investors, and pointed to the needed investment to make power plants compliant with new environmental regulations as adding urgency to this issue.

Indiana businesses have seen their electricity rates shoot up nearly 62 percent over the last 10 years, the customers said.

Customers signing the letter included:

7-Eleven Inc.

The Andersons, Inc.

Big Lots Stores Inc.

Boston Market Corp.

Cargill Inc.

Lowes Homes Centers Inc.

Macy’s Inc.

Mayer Management Inc.

Owens Corning

Peru Pizza Co. Inc. and Captain Development Co. Inc (Daland Corp. affiliates)

Quality Supply Chain Inc. (on behalf of Wendy’s Restaurant Operator members in Indiana)

Rite Aid Corp.

Staples Inc.

Wabash Valley Pizza Hut Inc.

Wal-Mart Stores Inc.

Watkins Take-Home Restaurants, Inc. 

Saturday, 14 September 2013 14:30

GAS PRICES

For week ending Sept 13 the gas market was flat relative to the week prior.  Spreads between the 12, 24, and 36 month terms were unchanged, so there does not appear to be an advantage to locking in rates greater than 12 months.  When the spreads get tighter, it is an indication of low inflation, and an opportunity to go longer when locking in your fixed price.  As spreads become wider, it is a reflection of increased volatility, which usually translates in a premium the longer you elect to lock your rate.  The possibility of US military involvement in the Middle East continues to exist causing some market uncertainty, however a weak hurricane season and cooler fall temperatures add to low levels of market volatility.

New gas storage levels came out on Sept 12 for the week ending Sept 6. The data showed 3,253 Bcf of gas in the system, up 65 Bcf from the previous week, or up 2%.  The prior year’s report ending the same week showed 3,425 Bcf in the system, so the levels have come down 5% vs the comparable period a year ago.  The being said, present gas in the system is at around the 5 year average of 3,207 Bcf.

Customers looking for price protection should elect to lock their rates with a 6 month fixed price product.  Those customers seeking the flexibility of short term contracts, and being able to participate in the benefits of lower index pricing should elect to go with a variable price product. 

Saturday, 07 September 2013 15:42

GAS PRICES

The past several weeks has seen gas prices run up, however we did see some relieve after Thursday’s storage report, a decline that continued Friday, for the week ending September 6th..

I have not posted before on the impact of the US Energy Information Administration (“EIA”) storage numbers that come out every Thursday at 10:30 am eastern time, and more often than not has an immediate impact on the market be that up or down.  The EIA reports the amount of natural gas storage in the US system each week, and is a measure of the amount of gas supply that is able to meet the demands of consumers across the US.  Analysts make their estimates of what that storage number will be.  When the actual figures come in, the market reacts to those storage levels being over or under the market expectations, largely determined by those same analyst estimates.  The inventory levels of gas are measured in billion cubic feet (“Bcf”).  The levels are always reported as of the prior week’s storage levels.  The data reported on 9/5/2013 showed 3,188 Bcf, up 58 Bcf from the previous week, or up 2%.  The prior year’s report ending the same week showed 3,398 Bcf in the system, so the levels have come down 7% vs the comparable period a year ago.  The being said, present gas in the system is at around the 5 year average of 3,145 Bcf.

Political turmoil in the Middle East, threat of the US going to war, and the active period of the hurricane season can all lead to volatility in the coming months.  Winter season and colder weather also presents a risk of increased volatility in the power and gas markets.  Those customers looking for price protection should elect to lock their rates with a 6 month fixed price product.  Those customers seeking the flexibility of short term contracts, and being able to participate in the benefits of lower index pricing should elect to go with a variable price product. 

Arizona Commissioner to Hold Stakeholder Meetings on Retail Choice Topics

September 3, 2013

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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Karen Abbott • This email address is being protected from spambots. You need JavaScript enabled to view it.

Arizona Corporation Commissioner Brenda Burns informed her colleagues that she will hold a series of meetings with stakeholders regarding specific topics in the Commission's retail electric choice investigation, stating there is, "a great deal more information to acquire, research, study and discern in order to assist me in my full consideration of the Retail Competition matter."

"As many have noted, the decision on whether or not to pursue Retail Competition in Arizona is one of the most, if not, 'the most' important decision to face the Commission in more than a decade. I have appreciated the fervor and passion displayed by both sides of this crucial question and I have learned a great deal from both the advocates and opponents of the proposal to pursue this venture," Burns said.

"However, I feel that I still have a great deal more information to acquire, research, study and discern in order to assist me in my full consideration of the Retail Competition matter," Burns said.

"There are some distinct issues that I wish to delve into on a deeper scale. I will be inviting several key stakeholders to the Commission to discuss and deliberate these separate topics so that I can weigh the disparate arguments and ask questions of both sides. I trust that all of you share my concerns and frustrations with the limited way we can discuss and weigh the conflicting volume of evidence as it has been presented to us for the better part of this year," Burns said.

"These discussions will be noticed and anyone who wants to attend in order to listen and observe is welcome. It is my desire to move in a deliberate, thoughtful and prudent manner towards an informed decision when I/we finally vote on this matter. I anticipate inviting stakeholders to meet throughout the month of September on the various topics and invite you to join me in any or all of these meetings," Burns said. 

Friday, 30 August 2013 14:09

GAS PRICES

For week ending Aug 30th, gas markets are trending up for the third week in a row.  The 12, 24, and 36 month strips are now approaching the $4.00 mark, slightly above where they were at this time in 2012, and off the hi marks we saw at this time in 2011.  The spread between the 12, 24, and 36 month terms are relatively unchanged, so there does not appear to be an advantage for locking into long term fixed price products from a pure price perspective, although short terms locks of 6 months to one year will provide customers with a great deal of price certainty this coming winter season and into next summer for the 12 month product.  Variable price products may be lower, but will lack the protection of a fixed price product to protect against cold weather related effects on natural gas demand in the winter season.

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