May 26, 2009

Natural Gas Rally Fizzles Out
This morning, natural gas is continuing to trend downward, which has been the trend over the past three days of trading. At 11:40 AM on Tuesday, May 26, natural gas was trading at $3.49 per mmbtu on NYMEX; down $0.025. The sentiment in the market this week is that demand will continue to be flat, and that while the economy has bottomed out, there is no expectation of a significant recovery. The rally that we saw in natural gas last week may have been attributed to premature optimism. In the exploration area, the slump grows.

Natural Gas Exploration
According to Baker Hughes Inc. drilling projects are still declining. There are 711 active natural gas rigs; 782 rigs than last year at this time. Chesapeake Energy Corporation, the largest producer in the US, is in the process of selling $2.5 billion in assets to counter the increased borrowing expenses demanded from lenders. Needless to say, it is cheaper to idle an exploration rig than pay high interest expenses to extract natural gas that is priced at today's low levels. Chesapeake is reportedly selling some of its Barnett shales assets.

Natural Gas Storage
Working gas in storage was 2,116 Bcf as of Friday, May 15, 2009, according to EIA estimates. This represents a net increase of 103 Bcf from the previous week. Stocks were 514 Bcf higher than last year at this time and 387 Bcf above the 5-year average of 1,729 Bcf.

Natural Gas Market Watch- Intraday Prices Snapshot
Here are the intraday prices on the NYMEX electronic market today (Monday) at about 11:25 AM for the next six months($ per mmbtu, intraday prices):

Jun. $3.490 -0.025
Jul. $3.610 -0.026
Aug. $3.741 -0.025
Sep. $3.835 -0.031
Oct. $3.993 -0.033
Nov. $4.690 -0.032

Natural Gas Futures:
PMC 30-Day, 90-Day, 12-month Natural Gas Futures Chart

Crude Oil Watch
West Texas Cushing traded up $0.12 to $61.54 per bbl today at 12:16 PM.
NYMEX Crude front month future is down a penny to $61.66 per bbl at 12:23 PM today.
 OPEC Basket Data

Electricity Watch
The Northeastern day ahead pricing is stable with all zones below $35.00 per mwh.
For more information view the Day Ahead Electric pricing data charts from the PMC database, updated every Monday.

Efficiency Tip No. 2-
Green Your Information Technology Centers
(We are adding a brief section to our newsletters that highlights developments in energy efficiency. Efficiency is the Holy Grail in the pursuit of global energy sustainability. Some have gone as far as call energy efficiency, our fifth fuel.)

Computer data centers and server farms consume as much as 6500 MWHs of energy a year, making them an excellent target for efficiency programs. The server industry has provided significant productivity improvements with the advent of virtualization and blade computing, but demand continues to expand. We love our digital world of ipods, facebooks, youtube movies and games, games, games.

Most companies do not have tens of thousands of square feet dedicated to electronics, but that doesn't mean your company can't green your IT.

Power Management Company can help you re-engineer your hardware and show you how to use the heat generated from IT nodes to warm your offices. Ask a Power Management analyst to perform a Lightsavers energy audit that is IT focused. You might be surprised at how easy it is to reduce your costs per kilobyte by streamlining your IT and developing a combined heat and power (CHP) strategy. Click here to review an EERE document for data centers that details a few of the tactics.
 
Weather Trends
According to the National Weather Service, most of the Northeast, Texas and Louisiana will be cool over the next ten days with above average heat throughout the Western states. 
NOAA Forecast for Next Week
8-14 Day forecast
NOAA Forecast- 30-Days

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.