March 7, 2011

Natural Gas Storage is 9 BCF Below Last Year's Level

Working gas in storage was 1,745 Bcf as of Friday, February 25, 2011, according to EIA estimates. This represents a net decline of 85 Bcf from the previous week. Stocks were 9 Bcf less than last year at this time and 15 Bcf below the 5-year average of 1,760 Bcf. Analysts seem to feel that since we are at the tail of the heating season, a slight negative position for storage levels is not significant.

Natural Gas Futures Still Toppling

In the natural gas futures market, front month prices are still trending down. At 10:15 this morning, the prompt month gas (April) is still low at $3.872 per mmbtu, though it is up $.062 per mmbtu. This is a good time to consider locking-in a percentage of your natural gas for next winter.

Six weeks ago, natural gas seemed to be moving toward $5.00 per mmbtu, but reversed its trend to current levels. The disparity between the trading in crude (currently trading at $105.00 pbl) and natural gas is worth noting. In the 2005-2008 era, the two fuels seemed to be linked at the hip. For the past few months, they seem to be moving in totally different directions.

Natural Gas Futures

CME-NYMEX natural gas futures market intraday prices for March 7, 2011 at 10:15 AM
(Prices are USD per mmbtu)

Apr. - $3.853 +$0.044
May - $3.924 +$0.037
Jun. - $3.990 +$0.033
Jul. -  $4.062 +$0.026
Aug. - $4.094 +$0.023
Sep. - $4.109 +$0.025

PMC 30-Day Natural Gas Futures Chart

Crude Watch- Unrest Roils World Crude Markets

Light Sweet Crude (WTI) is trading on the CME/NYMEX market at $105.70 bbl, up $1.28 at 9:17AM.
 OPEC Basket Data

Electricity Watch

Electricity prices for all zones have pulled back below $50.00 per MWH today as the intense cold dissipates across the US.

For more information view the Day Ahead Electric charts from the PMC database, updated every Monday.

Suez GDF Opposes New Connecticut Tax on Generators
In the past we have commented on predatory taxes that legislatures have imposed on businesses and retail customers. In Connecticut, the cash-strapped state government is imposing a new tax (Governor's Bill 1007) on electricity generators in the state. GDF Suez is one of the few generators who produce renewable energy in a state that has very few renewable energy resources. It opposes the new tax levy and urges that it not be passed.

State governments in the Northeast have a tendency to balance budgets by taxing energy. This regressive tax policy hurts business and retail consumers alike by driving up costs, discourages generator growth and slows the development of renewable energy generation.

Suez estimates that the bill will cost Connecticut consumers $58 million. No other state has a similar tax on generation. Energy companies are concerned that if one state passes it, others will follow.((Letter from GDF Suez)

Interesting Links and Resources

(Click on Links to View)

Energy Efficiency Resource  (There are still incentives available. Site:DSIR)

Natural Gas Prices May Rise  (Barnett Shale)

Chevron Moving Away From Coal (Seeking Alpha)

FERC Gives A Break to EnerNOC, A Demand Response Company  (Reuters)


Weather Trends- Indicators of Spring Detected
The National Weather Service's 6-10 Day Forecast indicates that a general warming trend will span most of the US.

6-10 Day forecast
8-14 Day forecast
NOAA Forecast- 30-Days
El Nino-La Nina (Pacific Ocean Temperature Levels)
Arctic Oscillation (Arctic Pressure Patterns)
Jet Stream Forecast (SFSU)