Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised that there was a withdrawal of 20Bcf from Underground Storage for the week ending December 28th, 2018.

This is 5Bcf below the median forecast of a 25Bcf withdrawal, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. The withdrawal compares with -193Bcf last year and -107Bcf for the five-year average. Storage is 450Bcf below last year for the same week and 560Bcf below the 5-year average. Working gas in storage stands at 2,705Bcf. The deficit vs. last year has dropped by 150Bcf over the past 45 days.

Natural Gas Pricing


As of 9:02AM CST, February 2018, (the prompt month) Natural Gas was trading at $2.97, -$0.68 from one week ago and the 1-Year Spread average was $2.77, -$0.23 from one week ago.

Crude Oil Pricing


As of 8:48:AM CST, February, 2018, (the new prompt month) Light, Sweet Crude on the NYMEX was at $48.67, +$3.21 from one week ago.

Crude Oil Inventory


US crude inventories decreased by 0.1 million barrels to 441.4 million barrels for the week ended December 21st, according to data released this morning by the US Department of Energy. Traders in the Reuters poll projected a decrease of 2.4 million barrels.

U.S. Rotary Rigs


U.S. Rotary Rigs drilling for natural gas were +1 at 198 for the week of December 28th. The number of rigs currently drilling for Natural Gas was +16 from last year. US Rigs drilling for oil were +2 at 885. There are 138 more rigs targeting oil than last year. Canadian rigs were -61 at 70 for the week. Rigs targeting oil remain 82% of all US drilling activity.

Geopolitical


U.S. energy use for transportation keeps growing: Energy consumption for transportation  continues to increase in the U.S. relative to most other countries, according to a recent report by the International Energy Agency.
(Greentech Media)

• Over the last three years, 14 states have enacted annual fees for electric vehicles to make up for lost gasoline tax revenue. (Governing Magazine)
• A trend appears to be gaining ground in which pickup truck owners purposefully block electric vehicle charging stations. (E&E News, )

• Multiple Midwest utilities’ renewable energy pledges in 2018 make the region a leader in the clean energy transition. (InsideClimate News)

• A university study says Texas could phase out coal by better coordinating wind and solar energy production across the state.  (Houston Chronicle)

• Energy efficiency investments have allowed a southeastern Michigan congregation of Dominican Sisters to invest in renewable energy. (Energy News Network).

Weather

The AccuWeather 1-5 day Outlook forecasts above-normal temps for the all of the US except a small portion of the Southwest, which is expected to be at normal or below-normal temps. The 6-10 Day Outlook forecasts the Northeast, part of the Central US and Southwest -including California- at above-normal temps with the balance of the country at normal temps. 

11-15 Day Outlook  forecasts the Eastern third of the US -except for Florida- and the far North at above-normal temps, California, Arizona and Nevada at above-normal temps and the balance of the country at normal temps. The 30-day Outlook projects normal temps for almost all of the US except part of the Northwest, which is expected to be above-normal and the Southeast, which is projected to be below-normal.

The 90-Day Outlook projects the most of the country at normal temps with the exception of the Western third of the US, which is expected to be at above-normal temps and much of the Southeast, expected to be at below-normal temps. The East Coast is projected to be at normal temps.

Sustainability and Renewables


Printed Graphene technology could revolutionize wearable electronics: A novel method for printed Graphene technology could revolutionize wearable electronics and IoT applications. The method has been developed by a research team based at the University of Manchester, and reduces the cost of conductive Graphene inks for printed Graphene technology. This has potential benefits for technologies such as wearable electronics and semiconductors.
Printed electronics and the Internet of Things: Printed electronics are a breakthrough in the everyday applications of information technology. Internet of Things (IoT) applications will be promoted by the possibility of printing electronic circuits.

The development of printed conductive inks for electronic applications has grown quickly, with applications in transistors, sensors, antennas RFID tags and wearable electronics. Currently, conductive inks use metal nanoparticles for their high electrical conductivity. These materials can be expensive or easily oxidized, which is not ideal for low-cost IoT applications.

This Week's Key Take-Away

Texas electricity users who will need to enter into a new contract over the next 8 months are asking, "If Natural Gas prices have dropped so precipitously, (see the Natural Gas Pricing section above) and the spot market is at $0.03/kWh then why are we still seeing such high prices for electricity?" Great question.

If you recall, last February, due to the retirement of coal-fired electric generation plants, ERCOT (the grid) issued a warning that they expected a capacity problem during the coming summer. This means that they felt that there would not be enough generation to supply the state in the event of warmer-than- normal temperatures and blackouts and brownouts were possible. This announcement caused the Retail Energy Providers to raise their prices significantly -in February- under the assumption that spot prices were  going to rise during the summer because of the lack of available electricity.

The providers are now waiting for ERCOT to release their latest forecast, (Jan 17) which needs to have 11% reserve margin minimally, before they will release their reserve margins. Stay tuned!