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Feb. 15, 2010
Once Again, Cold Weather Drives Gas Out of Inventory
The EIA reported a larger than expected
withdrawal number in its Weekly Natural Gas Storage report last week of 191 BCF. For the first time in memory, 49 of 50 states reported new snow on the ground last week; the exception being Hawaii.
And with the National Weather Service predicting more snow and cold weather ahead, we can expect several more weeks of substantial withdrawals from inventory.
Compared to last year, natural
gas is trading up a little over 19%. In a Bloomberg.com article last Friday, Reg Curren commented that stockpiles may decline to 1.5 TCF by the end of the heating season. Last march the US had a
hefty 1.65 TCF left in inventory. Teri Viswanath, director of commodities research with Credit Suisse Securities USA in Houston noted: " The market has a 1.6 trillion level in mind, but
we'll be below that. It is not too concerning, but it should provide support for the front of the price curve." (bloomberg.com, 2/12/10)
Natural Gas Storage Report
Working
gas in storage was 2,215 Bcf as of Friday, February 5, 2010, according to EIA estimates. This represents a net decline of 191 Bcf from the previous week. Stocks were 172 Bcf higher than last year at
this time and 114 Bcf above the 5-year average of 2,101 Bcf.
China's Natural Gas Appetite Growing
China is fast becoming the world's leading energy consumer. Its massive stimulus
plan seems to have kept their economy growing and with it, their demand for energy. China's natural gas output rose by 7.7 percent last year, it was still not enough for ever rising domestic demand.
According to China Petrochemical Industry Association, the country produced 83 billion cubic meters of natural gas last year, while it consumed 87.45 billion cubic meters, up 11.5 percent
year on year. Natural gas consumption has been surging at a double-digit growth rate annually since the start of this century. China saw a rise of 12.3 percent in gas output to produce 76.08 billion
cubic meters of gas in 2008, but its consumption stood at 80.7 billion cubic meters that year. China is the primary demand driver for higher LNG prices worldwide. (Source: commodityonline.com)
Natural Gas Market Watch- Intraday Prices Snapshot
Here are the intraday prices on the CMEG/NYMEX electronic market today (Monday) at 11:00 AM for the next six months($ per mmbtu, intraday
prices):
Mar. $5.466 -0.002
Apr. $5.444 -0.003
May. $5.495 0.000
Jun. $5.570 +0.006
Jul. $5.633 -0.003
Aug. N/A
Natural Gas Futures:
PMC 30-Day Natural Gas Futures Chart
Crude Oil Watch
NYMEX Crude front month future is up $0.10 to $74.23 at 9:58 AM.
West Texas Cushing traded down $1.13 to $74.13 per bbl on 2/12/10.
OPEC Basket Data
Electricity Watch-
Electricity for the NYISO is trending down slightly with PJM and ISO-NE moving higher together. Prices are close in range to where they were last year which
may indicate that the market has found a middling ground. If you have energy contracts expiring this month, one of the tactics to consider is to float the market with basis. The market could go
either way at this juncture.
For more information view the Day Ahead Electric pricing data charts from the PMC database, updated every Monday.
Weather Trends-
According to NWS maps, almost the entire Lower-48 will have cooler than average weather over
the next 14-days. The Arctic Oscillator is still strongly down and the ElNino seems to be warming slightly.
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.
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