Volume 11, Issue 34 | August 30, 2013

Editor's Note

Prices Flat as the End of Summer Nears

Week in Review for August 23-29, 2013

Energy prices closed relatively flat this week, following two weeks of price increases. During this week's seven-day report period, the average 12-month price for natural gas on the New York Mercantile Exchange (NYMEX) only rose 1% and the 12-month average price for peak power on the PJM was nearly identical to last week's closing price. During the previous two-week period of August 9-22, natural gas prices had risen 7.9% and electricity prices increased 4.2%.

For all practical purposes, summer is over. Even though the official start of autumn isn't until September 22, the impending arrival of the fall season seems to have calmed the marketplace and put the brakes on the recent price rally.

In the energy business, we commonly refer to autumn as the "shoulder season," a period of time where we experience minimal need for either heating or cooling. Perhaps the arrival of this shoulder season will place some downward pressure on energy prices that had, until very recently, been on the rise.

Stay tuned and have a happy Labor Day weekend!


Spotlight on Carbon Offsets

Washington Gas Energy Services to Offset Carbon Impact of Upcoming RETECH Conference

RETECH 2013This year’s RETECH Conference, September 9-11, will be entirely carbon neutral thanks to the sponsorship of Washington Gas Energy Services. Our WGES CleanSteps® Carbon Offsets product will be used to counterbalance the carbon impact from attendee travel to Washington, D.C., as well as energy use from hotel rooms and the conference itself. This effort will offset the emissions of more than 426,000 pounds of carbon dioxide, which is equivalent to avoiding the consumption of over 21,000 gallons of gasoline.

WGES CleanSteps® Carbon Offsets support independently verified carbon-reduction projects in the areas of transportation and landfill gas. Through our partnership with the Chesapeake Bay Foundation, a portion of all offset purchases supports the Carbon Reduction Fund, which is used to develop clean air and water projects throughout the Chesapeake Bay region.

All Washington Gas Energy Services standard natural gas includes a baseline 5 percent match of carbon offsets to natural gas use for residential customers and a 3.5 percent match for small commercial customers. Both residential and small commercial customers can choose natural gas matched with 100 percent WGES CleanSteps® Carbon Offsets. Large commercial customers have the option to customize the percent of their natural gas that is matched with carbon offsets.

To learn more about our Large Commercial Service for WGES CleanSteps® Carbon Offsets, or to make your event carbon neutral, visit our website, or consult with your Account Manager.


Natural Gas Fundamentals

Natural Gas Storage: An Average Injection for the First Time This Month. Data Released August 29, 2013

 

 

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 

3,130

3,063

+67

3,365

3,085

This week's injection of 67 Bcf was near average for the first time this month. This week's injection was only 4% more than last year's number and only 1.5% larger than the five-year average.

Although this week's reported injection was close to normal, all of the previous injections during August were above average. Thanks to these larger-than-normal injections in August, natural gas inventories are 1.5% above the five-year average and only 7% below last year's record high levels.

The Energy Information Administration "predicted that storage gas will still reach 3,800 Bcf by the end of the traditional refill season October 31. Demonstrated peak storage capacity is 4,265 Bcf." We should have plenty of gas in storage as we enter the heating season.


Rig Count for Natural Gas

Weekly Drilling Rig Update: The active U.S. gas rotary rig count for natural gas released by Baker and Hughes for the week ending August 23, 2013 was 387 rigs. This was a decrease of one rig from the previous week. The count is 99 rigs lower than the count reported this same week last year. We are 55% below the five-year average gas rig count of 868.


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. 

Oct-12

$0.3023

Feb-13

$0.3226

June-13

$0.4148

Nov-12

$0.3471

Mar-13

$0.3427

July-13

$0.3707

Dec-12

$0.3696

April-13

$0.3976

Aug-13

$0.3459

Jan-13

$0.3354

May-13

$0.4152

Sept-13

$0.3567


NYMEX Values per Month for the Forward 12 Months

Thursday, August 29, 2013

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

Oct-13

$0.3618

Mar-14

$0.3919

Aug-14

$0.3944

Nov-13

$0.3720

April-14

$0.3849

Sept-14

$0.3943

Dec-13

$0.3874

May-14

$0.3868

12-month avg.

$0.3873

Jan-14

$0.3958

June-14

$0.3896

11/2013-03/2014

$0.3885

Feb-14

$0.3957

July-14

$0.3928

Crude Oil

$108/barrel 


NYMEX Graph for Natural Gas - 12 Month Average Price per Therm at the Louisiana Well-Head

(Excludes Interstate Transportation)



PJM Electricity

PJM Graph for Electricity - 12 Month Average Peak Power Price

On-Peak 1 Year Forward Price



Weather

Local Cooling Degree Days*


 

Cooling Degrees Day** 

 

May - 13

June - 13

July - 13

Aug - 13

Sept - 13

Oct- 13 

 Actual

 144

351

511


 


 


 

 Normal

108

314

457


 


 


 

 Departure from Normal

33%

12%

        12%

 

 

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.