Natural Gas in Underground StorageThe weekly EIA Natural Gas Storage Report advised that there was a withdrawal of 288Bcf (billion cubic feet) from Underground Storage for the week ending January 19th, 2018.
This is 12Bcf above the median forecast of a 276Bcf withdrawal, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. The withdrawal one year ago was 137Bcf and the 5-year average withdrawal is 164Bcf. Storage is 519Bcf below last year for the same week and 486Bcf below the 5-year average. Working gas in storage stands at 2,296Bcf.
Natural Gas PricingAs of 9:33AM CST, February 2018, (the prompt month) Natural Gas was trading at $3.48, + $0.37 from one week ago and the 1-Year Spread average was $3.02, +$0.13 from one week ago.
Crude Oil PricingAs of 9:38AM CST, February, 2018, (the prompt month) Light, Sweet Crude on the NYMEX was at $63.81, +$2.50 from one week ago.
Crude Oil InventoryUS crude inventories fell by 1.1 million barrels to 411.6 million barrels for the week ended Jan. 5th, according to data released yesterday morning by the US Department of Energy. Traders in the Reuters poll projected a draw of 1.6M barrels.
U.S. Rotary RigsU.S. Rotary Rigs drilling for natural gas were +2 at 189 for the week of January 19th. The number of rigs currently drilling for Natural Gas was 47 higher than last year’s level of 142. US Rigs drilling for oil were -5 at 747. There are 196 more rigs targeting oil than last year. Canadian rigs were +49 at 325 for the week. Rigs targeting oil remain at 80% of all drilling activity.
GeopoliticalLast week, some rare positive environmental news reached the public eye: Nearly half of all the new, large-scale electric power generation installed last year use renewable energy sources, according to the Energy Information Administration. The government agency reports that of the total 25 gigawatts of capacity installed in 2017, about 12 gigawatts of that amout came from clean energy—plus an extra 3.5 gigawatts of small-scale solar, like rooftop panels.
WeatherThe AccuWeather 1-5 day Outlook forecasts above-normal temps for the majority of the US. The balance of the country will be at normal temps. The 6-10 Day Outlook projects a similar forecast but with the upper Midwest at below-normal temps. The 11-15 Day Outlook forecasts the East and Southwest at above-normal temps with the Northwest and Midwest at below-normal temps. The 30 and 90-day Outlook shows mostly normal temps for the majority of the US with the North-Central states below-normal and the Southern-most states at above normal temps.
PG&E Launches Country’s Largest Utility-Sponsored EV Charging Program:
Sustainability and Renewables
The pilot program will introduce 7,500 electric car chargers in California. More utility electrification initiatives to come. After years of bargaining, Pacific Gas & Electric officially launched its EV Charge Network pilot program on Wednesday.
It’s the largest utility-sponsored EV charging program in the country. The results could offer lessons on the best path forward for other states that hope to implement EV adoption.
This Week's Key TakeawayCrude pricing has reached it's highest point since December of 2014. Natural Gas Storage is over 500 billion cubic feet below last year. Both of these fundamental indicators are causing the price of Natural Gas and therefore electricity to rise significantly.
That said, although the front-month of Natural Gas prices on the NYMEX is over $3.40, the one-year spread is just above $3, which is where it has been hovering for the past year. The actual temperatures in February will determine just how much Natural Gas prices move and the level of demand for heating.