Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised that there was a withdrawal of 78Bcf from Underground Storage for the week ending February 8th, 2019.

This is 7Bcf below the median forecast of an 85Bcf withdrawal, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. The withdrawal compares with a withdrawal of 183Bcf last year and 160Bcf for the five-year average. Storage is 30Bcf below last year for the same week and 333Bcf below the 5-year average. Working gas in storage stands at 1,882Bcf. Thanks to lower natural gas prices, coal-to-gas switching is back above the norm. Read more ...

Natural Gas Pricing


As of 9:42AM CST, March 2018, (the prompt month) Natural Gas was trading at $2.61, even with one week ago and the 1-Year Spread average was $2.80, +$0.01 from one week ago.

Crude Oil Pricing


As of 8:52AM CST, March, 2018, (the prompt month) Light, Sweet Crude on the NYMEX was at $53.51, +$0.02 from one week ago. The EIA has announced that 2018 was a record-breaking year for crude production and that 2019 and 2020 will be even higher.

Crude Oil Inventory


US crude inventories increased by 3.6 million barrels to 450.8 million barrels for the week ended February 8th, according to data released yesterday morning by the US Department of Energy. Traders in the Reuters poll projected an increase of 2.7 million barrels.

U.S. Rotary Rigs


U.S. Rotary Rigs drilling for natural gas were -3 at 195 for the week of Febreuary 8th. The number of rigs currently drilling for Natural Gas was +11 from last year. US Rigs drilling for oil were +7 at 854. There are 62 more rigs targeting oil than last year. Canadian rigs were -3 at 240 for the week. Rigs targeting oil remain at 81% of all US drilling activity.

Geopolitical


The Energy 202: ‘There’s no reason for us to wait.' Four more Dem governors join alliance to uphold Paris climate goals:

Some states aren’t waiting around for Congress to pass a Green New Deal to tackle climate change.
Wisconsin Gov. Tony Evers (D) plans to announce today that he's joining the U.S. Climate Alliance, his staff confirmed to The Energy 202. Evers is the latest of four newly elected Democratic governors to join the group of states that have pledged to meet the goals outlined in the Paris climate accord, even though Trump vowed to withdraw the United States from the global pact meant to reduce greenhouse gas emissions. 

Michigan Gov. Gretchen Whitmer, New Mexico Gov. Michelle Lujan Grisham and Illinois Gov. J.B. Pritzker announced their participation in recent weeks. These latest commitments expand the bipartisan coalition from a group of mostly coastal states to a group of 21 that is more representative of the broader country. Read more ...

Weather

The AccuWeather 1-5 day Outlook forecasts above-normal temps for the Eastern US, including New England. The South, through Texas will also be at above normal temps. The Western and Northern US is forecast to be at below-normal temps with normal temps the balance of the nation. The 6-10 Day Outlook forecasts the Southeast at above-normal temps with balance of the country at  at below-normal temps.

11-15 Day Outlook  forecasts an identical picture to the 6-10 Day Outlook. The 30-day Outlook projects below-normal temps for the Northeast and North-Central states,  above-normal temps for the deep Southeast and part of the Southwest and normal temps for the balance of the country.

The 90-Day Outlook projects normal temps for the entire country, with the exception of the far Northwest, which is expected to be at above-normal temps. Winter storms have brought snow through much of the North this week, with Illinois setting all-time cold temperature records. Also, Hawaii has seen snow this week.

Sustainability and Renewables


The Green New Deal Needs These 5 Cutting-Edge Energy Innovations to Succeed: The Green New Deal proposed by Rep. Ocasio-Cortez and Sen. Ed Markey is ambitious, which it must be if it's going to combat climate change. But reaching those goals would require some serious innovation.

The blueprint for a Green New Deal, recently proposed by Rep. Ocasio-Cortez and Sen. Ed Markey, certainly has succeeded in focusing national attention on the question of how we will battle climate change in critically important years to come. Whatever plan is adopted (or not), preventing a changing climate from devastating our communities will almost certainly require some technological innovation. Here are five developing strains of science and industry that could help form the foundation of a Green New Deal:

1. Electric Planes

One of the social media flashpoints in the Green New Deal plan was the suggestion to "build out high-speed rail at a scale where air travel stops becoming necessary." It's a lofty goal, considering that in 2017, according to the FAA, commercial flights in the United States carried a total of 971,595,898 passengers. But air travel, beyond being an unpleasant experience for many, is a major polluter. Air travel accounts for 9 percent of the greenhouse gases produced by U.S transportation.

For regions where rapidly expanding rail travel might be a tall order, electric planes could provide a cleaner alternative. Currently in their earliest stages, companies like Eviation and the Boeing-backed Zunum.Aero want all-electric and hybrid-electric planes that could hit around 650 mile trips.  Read more ...

This Week's Key Take-Away


Where is Natural Gas Going?  Natural gas is fast becoming the main source of U.S. electricity, (currently at 33% of US generation).

Electricity accounts for a leading 35% of total U.S. gas demand, or a rising 9.6 trillion cubic feet consumed for power-burn/ year. Eeven though U.S. power consumption has been flat, Natural Gas used to generate electricity is up 42% in the shale-era since 2008.

Utilities cut back on their NG usage and ramped up coal power. Right before Christmas, coal production and transport was at its highest level since August 2017. With more coal and nuclear plants being retired prematurely, (due to ROI) it will be increasingly more difficult to cut NG demand even if prices rise, as we are installing a lower "price elasticity of demand."

Some 20% of the U.S. coal fleet has been retired since 2011, with more to come (4,500 megawatts of coal retiring this year alone). 6 nuclear units have retired since 2012, with another 15 coming over the next 7 years, including the infamous Three Mile Island retiring this year.

The renewables being promoted as perfect substitutes for baseload coal and nuclear are naturally intermittent, meaning that gas will become the clear-cut favorite until utility-scale battery storage of electricity becomes real. Additionally, LNG exports hit a record of nearly 110 Bcf in November 2018. This is a 35% jump from November 2017, with much more to come.

What does it all mean? With Natural Gas production at all-time highs in the US, the nation is using and exporting more of the commodity than ever. Stay tuned.