Volume 10, Issue 34 | August 24, 2012

All Eyes Are On Tropical Storm Isaac

Week In Review For August 17 - 23, 2012

Week In Review For August 17 - 23, 2012

Natural gas and electricity prices are range bound for now. Over the past five weeks, prices have increased one week but then have immediately fallen the next week. Here we go again. Last week, the average price for natural gas on the NYMEX fell 5% while the 12-month average price for power on the PJM remained flat. For this seven-day report period, prices ran in the opposite direction. The average price for natural gas on the NYMEX rose 1.7%. The 12-month average price for peak power on the PJM actually fell 0.2%, a very slight decrease but, nevertheless, a decrease.

There is a new variable hitting the news wires today, however, that may place some upward pressure on energy prices. The big story is Tropical Storm Isaac, which is gaining intensity in the Caribbean and possibly heading for the Gulf of Mexico. If natural gas producers are forced to shut-in their wells during the storm, we may see some price spikes next week. Stay tuned.

Natural Gas Storage: Gas Surplus Shrinks for 17th Week in a Row - Data Released August 23, 2012

Working gas in storage for the week ending August 17, 2012 was 3,308 Bcf.


 

 Current Week

Last Week 

Net Change

 This Week Last Year 

 Prior 5 Year Average

 

 Stocks (Bcf)

Stocks (Bcf)

(Bcf)

Stocks (Bcf)

 Average (Bcf)

 Total Lower 48

3,308

3,261

 47

2,885

2,951

Storage Update: For the seventeenth week in a row, the natural gas storage surplus shrunk. For this seven-day report period we saw an injection of 47 Bcf. Last year at this time we saw an injection of 66 Bcf. The five-year average injection for this week was 53 Bcf. Even though this week's injection was finally closer to normal, the natural gas storage surplus, on a year-to-year basis, shrank again going from 15.6% above last year's levels to 14.6%. The natural gas storage surplus over the five-year average shrank from 12.5% to 12%. Since May 3, 2012 the gas surplus has shrunk from 55% above the five-year average to 12% above the five-year average. Even though the gas bubble is shrinking, natural gas storage fields are still near record-high levels for this time of year. The traditional injection season ends October 31.

Baker Hughes Rotary Rig Count For Natural Gas

Active U.S. gas rig count released by Baker Hughes for the week ending August 17, 2012 was 484 rigs.

Weekly Drilling Rig Update: The active U.S. gas rotary rig count released by Baker and Hughes for the week ending August 17, 2012 was 484 rigs. This was a decrease of 11 rigs from the previous week. The count is 416 rigs lower than the count reported this same week last year. We are 54% below the five-year average gas rig count of 1,058. This is the lowest natural gas rig count since August of 1999.

NYMEX Natural Gas Monthly Settlements For the Past 12 Months

(Price per therm at the well-head)

This was the closing price of gas at the well head for each of the past 12 months. The closing price for a month occurs on the 3rd business day prior to the start of the month. 

Sept-11

$0.3857

Jan-12

$0.3084

May-12

$0.2036

Oct-11

$0.3759

Feb-12

$0.2678

June-12 

$0.2429

Nov-11

$0.3524

Mar-12

$0.2446

July-12 

$0.2774

Dec-11

$0.3364

April-12

$0.2191

Aug-12

$0.3010

NYMEX Values Per Month For the Forward 12 Months

Thursday, August 23, 2012
Price per therm at the Henry Hub well-head

(NYMEX - Price per therm at the Henry Hub well-head)

Sept-12

$0.2802

Feb-13

$0.3441

July-13

$0.3528

Oct-12

$0.2839

Mar-13

$0.3426

Aug-13

$0.3547

Nov-12

$0.3021

April-13

$0.3414

12-month avg.

$0.3306

Dec-12

$0.3291

May-13

$0.3450

11/12-3/13

$0.33204

Jan-13

$0.3423

June-13

$0.3490

Crude Oil

$95/barrel 

NYMEX Graph For Natural Gas - 12 Month Average Price Per Therm at the Well-Head

(Excludes Interstate Transportation)

 

Graph - PJM 12-Month Average Peak Power Price

On-Peak 1 Year Forward Price

Local Cooling Degree Days*

 

Cooling Degree Days** 

 

May - 12

June - 12

July - 12

Aug - 12

Sept - 12

Oct- 12 

 Actual

209

346

595

 

 Normal

108

314

457

 

 Departure from Normal

93.5%

10% 

30%

 

Warmer

Warmer

Warmer

 

**Cooling degree days are calculated by comparing the day’s average temperature to a 65 degree baseline.  If the day’s average temperature is below 65, there are no cooling degree days that day.  If the average temperature is greater than 65 degrees, then subtract 65 from the average temperature to find the number of cooling degree days.