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Industry News (410)

Saturday, 09 November 2013 16:58

GAS PRICES

This week’s gas market started down and trended back up after Thursday’s storage report. Weather was a non factor, however anticipate the north east to experience colder temperatures as we get into the winter season. This will cause a kink in the demand curve, with natural gas being the heating source for many residential and business furnaces. The prompt month was up $0.05 cents for the week. Spreads between the 12, 24, and 36 month strips were consistent at 3% and 5%. Prices are well off from when the $4.00 level had been breached, closing in the $3.66 to $3.87 for the 12, 24, and 36 month strips.

New gas storage levels came out on November 7, for the week ending November 1. The data showed 3,814 Bcf of gas in the system, up 35 Bcf from the previous week, or up 1%. The prior year’s report ending the same week showed 3,926 Bcf in the system, so the levels have come down 2.8% vs. the comparable period a year ago. That being said, present gas in the system is at around the 5 year average of 3,757 Bcf.

Many customers will be shopping this week to lock their Cal 13 price for power and gas. Given the low volatility seen in the markets, customers may still choose to float their rate with a variable product, and assume the risk of upward trending prices in order to take advantage of market downturns. Cold weather continues to be the biggest risk component for this group of customers by leading to increased demand of natural gas in order to heat their residences and businesses.

Saturday, 02 November 2013 17:07

GAS PRICES

Wow, what a week. Natural gas market gave back the rally seen two weeks ago and then some. Big price spikes came as a result of colder than forecasted temperatures throughout the north east, followed by a week on inactivity, and then the hammer came down. Prompt month gas has fallen off 30 cents per mmbtu since October 14 high. The 12 month strip had crossed the $4.00 level for the first time since June, now it is down to $3.63. This activity was a result of Thursday’s storage report which showed an increase of supply in the gas storage system rising 38 Bcf from the prior week’s measure. Expectations had been that the cold front in the North East would have more of an impact, and bring storage levels down. Spreads between the 12 and 24 month strips closed the week at $0.12 cents, indicating a strong buying opportunity for the 12 month product.

New gas storage levels came out on October 31, for the week ending October 25. The data showed 3,779 Bcf of gas in the system, up 38 Bcf from the previous week, or up 1%. The prior year’s report ending the same week showed 3,899 Bcf in the system, so the levels have come down 3% vs. the comparable period a year ago. That being said, present gas in the system is at around the 5 year average of 3,721 Bcf.

Following this week’s substantial decline, customers should take advantage of a great buying opportunity by locking in their winter gas and electric supply. The wide spread between the 12 and 24 month strip also indicates a buying opportunity for customers looking for 12 month price protection.

Saturday, 26 October 2013 14:45

GAS PRICES

Natural gas markets this week saw a decline in the beginning, followed by some upside pressure towards the end, however 12, 24, and 36 months strips all remained below the $4.00 level. Weather was a non event, however colder temperatures are starting to come in across north east markets, which should lead to higher demand and higher prices for heating fuels including natural gas. Prompt month gas ended the week off $0.05, and the strips were all off by a similar $0.05 - $0.07.
New gas storage levels came out on October 24, for the week ending October 10. The data showed 3,741 Bcf of gas in the system, up 87 Bcf from the previous week, or up 2%. The prior year’s report ending the same week showed 3,833 Bcf in the system, so the levels have come down 2.4% vs. the comparable period a year ago. That being said, present gas in the system is at around the 5 year average of 3,664 Bcf.

Monday, 21 October 2013 13:27

GAS PRICES

For the week ending October 18, gas markets saw a good amount of stability with prices being held relatively in line with the prior week’s close.  Temporary resolution in the nation’s debt ceiling limit, and reopening of the government appears to have already been priced in.  Weather and temperature levels were in line for this time of the year, and the run-up we saw in the prior week which was attributable to the uncertain winter season was not given back.  Prompt month gas was off a penny from last week’s close, and the 12, 24, and 36 month strips were all off anywhere from $0.02 - $0.03.  The week ended with the 12, 24, and 36 month spreads were unchanged from the prior week.

Locking in a fixed price contract for the winter season on the face looks to be expensive given the run-up in the curve from week ended October 11.  This past week as mentioned above was flat, so there was no correction in what appeared to be an anticipatory run-up.  Cold weather could bring additional upside pressure to prices, which could be hedged using a fixed price product to lock in your power and gas rates for the winter season.  Customers can elect not to pay this premium and bear additional price risk by electing to sign onto a variable price product for power and gas.

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. 

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