Feb. 1, 2010

Natural Gas Production Rises With Economic Prospects

With the technical news regarding the economy looking bullish, many businesses are wondering when they are going to directly benefit from the growth picture that was painted by the recent 5.7% Q4 GDP number. In the EIA's Monthly Energy Review report released today, data show that in the first 10 months of 2009, total energy consumed by the industrial sector fell to 23 quadrillion Btu, down 11% from the first 10 months of 2008. Industry represents 29% of natural gas consumption. If the economy is indeed on the threshold of recovery, industrial demand should place upward pressure on natural gas prices.

Natural gas producers have been aggressively putting equipment back to work, especially in the unconventional gas fields that we have written about so frequently. 647 of the 861 natural gas rigs in the US are horizontal completions. The terminology for shale gas as unconventional gas only makes sense to a DOE bureaucrat when you consider that 75% of US gas is now being produced from unconventional deposits such as the Haynesville Shales. For those following production trends, the rig count is up 28 since the previous week and up 90 over the past month.

Last Friday, natural gas declined to a 7-week low of $5.13 per mmbtu. This morning at 10:45, it has risen $0.172 to $5.303 per mmbtu.

Lower Than Expected Withdrawals Surprise Market

Working gas in storage was 2,521 Bcf as of Friday, January 22, 2010, according to EIA estimates. This represents a net decline of 86 Bcf from the previous week. Stocks were 120 Bcf higher than last year at this time and 87 Bcf above the 5-year average of 2,434 Bcf. The market was expecting almost twice that amount. The reason? Increased production from all those new completions.

Mass Customers Demand Value for Wind Power

In a U. Of Massachusetts Center for Policy Analysis poll released last week, the results "found that while Massachusetts electric ratepayers generally support wind energy, this support erodes rapidly if wind projects contribute to an increase in electric bills. The poll found a majority of respondents (55 percent) report they would not pay more for electricity produced by wind turbines." National Grid may purchase energy from the Cape Wind project, which could result in higher rates.

Clyde Barrow, director of the Center commented: "Despite the fact that 75 percent of respondents support or strongly support wind power projects, they are particularly price sensitive to increases to their electric bills as a result of the increased cost to produce offshore wind energy. Support for the project declines significantly as the estimated effect on a respondent's electric bill increases." The poll also found that voters would support politicians who support reducing utility rates over politicians who support wind power.

The results of the poll can be read at:www.umassd.edu/seppce/policyanalysis/docs/ng_poll.pdf. 

(Source: Newsblaze.com)


Natural Gas Market Watch- Intraday Prices Snapshot

Prices are rising today possibly due to the revised forecast for next week which will be cooler than average for most of the Midwest and East.
Here are the intraday prices on the CMEG/NYMEX electronic market today (Monday) at about 11:15 AM for the next six months($ per mmbtu, intraday prices):

Mar. $5.384 +0.253
Apr. $5.356 +0.236
May. $5.394 +0.223
Jun. $5.460 +0.218
Jul. $5.536 +0.214
Aug. $5.605 +0.215

Natural Gas Futures:
PMC 30-Day Natural Gas Futures Chart

Crude Oil Watch
NYMEX Crude front month future is up $1.03 to $73.92 at 11:13 AM.
West Texas Cushing traded up $0.53 to $73.42 per bbl at 9:03 AM.
 OPEC Basket Data
 
Electricity Watch-
Electricity is rising slightly on the Day Ahead Market today for PJM and ISO NE.



For more information view the Day Ahead Electric pricing data charts from the PMC database, updated every Monday.
Weather Trends-
According to NWS maps, the Eastern US will have cooler than average weather over the next ten days.
inter 2009-2010.
NOAA Forecast for Next Week
8-14 Day forecast
NOAA Forecast- 30-Days
El Nino-La Nina (Pacific Ocean Temperature Levels)
Arctic Oscillation (Arctic Pressure Patterns)

Written and Researched by Martin Linskey; Energy Charts developed by Charles Myers.

Disclaimer: This information is provided for the use of our customers and potential customers. Power Management Company assumes no responsibility or liability for the accuracy or completeness of pricing or information in this document. Historical data was obtained from sources that we believe to be reliable, but we do not guarantee its accuracy or completeness. It is not intended to provide advice or recommendation. Views are subject to change without notice.