August 17, 2009

Tropical Storms Arise, Natural Gas Sinks.
Despite the naming of the first hurricane of the season, Hurricane Bill, which is currently in the mid-Atlantic; and despite the presence of tropical storms Ana and Claudette, natural gas prices dipped as low as $3.14 per mmbtu this morning before recovering to $3.20 per mmbtu. Excellent inventory storage news, and a welcome cool-down for the Northeast are helping to keep prices low.

In one of the more unusual pairings, T. Boone Pickens, arch conservative, and Ted Turner, dedicated environmentalist, penned a letter to the Wall Street Journal editors this morning promoting T. Boone Pickens' mission to exploit US-based natural gas as the bridge fuel to an era of renewables. The letter is titled "New Priorities for our Energy Future". One of their ideas is for the US to introduce a "Cash for Clunkers" campaign for power generators.

" Adopting a "cash-for-clunkers" program in the utility sector can save money and reduce emissions right away by retiring the oldest, least efficient and most polluting power plants in exchange for modern gas-powered plants." (NY Times, 8/17/09))

Another reason that the Pickens-Turner plan is worth serious attention is the concern over the cost overruns that have been experienced in Europe regarding Areva-designed nuclear power plants. The hope in the industry was that they had finally found a modular nuclear design that could be built cost-effectively. That does not seem to be the case. The Areva-designed plant in Olkiluoto, Finland is estimated to be 50% over its $4.2 billion budget, and there is no firm completion date. It was slated for startup this summer. An Areva-designed French reactor under construction in Flammanville, France is also over budget.

Due to the construction meltdowns, Areva may need as much as $10 billion from the French treasury for a corporate bailout. Nuclear energy is viewed by many, including some environmentalists, as an essential component in the reduction of greenhouse gases. The Areva model was the "best case" for the rapid deployment of new nukes in the US. Obviously, the model needs some reworking before nuclear energy gains traction here. In the meantime, the Pickens-Turner plan seems to represent the most cost-efficient and simplest strategy to a future that is dependant on renewables. (Source: NYT, and electricityforum.com)

Natural Gas Storage 3.152 TCF and Growing
Working gas in storage was 3,152 Bcf as of Friday, August 7, 2009, according to EIA estimates. This represents a net increase of 63 Bcf from the previous week. Stocks were 592 Bcf higher than last year at this time and 517 Bcf above the 5-year average of 2,635 Bcf. A little over 15% of US annual consumption is now in storage, 90-days before the heating season begins. And yes, we have another record storage level for this date.

Natural Gas Market Watch-
 Intraday Prices Snapshot
Here are the intraday prices on the NYMEX electronic market today (Monday) at about 10:25 AM for the next six months($ per mmbtu, intraday prices):

Sep. $3.204 -0.034
Oct. $3.580 -0.058
Nov. $4.411 -0.108
Dec. $5.206 -0.104
Jan. $5.495 -0.089
Feb. $5.521 -0.102

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

Crude Oil Watch
West Texas Cushing traded down $1.31 to $66.20 per bbl today at 9:10 AM.
NYMEX Crude front month future is down $1.86 to $65.65 per bbl at 10:23 AM today.
 OPEC Basket Data

Electricity Watch- Bargain Prices Available
The Day Ahead price for NYISO Zones A, B and C is just below $40.00 per MWH.PJM and NEISO is just below $50 per MWH. With a cooling trend ahead, we expect these prices to decline.
For more information view the Day Ahead Electric pricing data charts from the PMC database, updated every Monday.
 
Weather Trends- Summer Chill Ahead
Most of the US will have seasonal conditions with cooler than average temperatures in the Northeast.
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.