Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised today that there was a withdrawal of 47Bcf from Underground Storage for the week ending March 15th, 2019.

This is 1Bcf below the median forecast of a 48Bcf withdrawal, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. The withdrawal compares with a withdrawal of 87Bcf last year and 56Bcf for the five-year average. Storage is 315Bcf below last year for the same week and 556Bcf below the 5-year average. Working gas in storage stands at 1,143Bcf. There is 1 week left in the historical withdrawal season. However, 3 more draws on storage are expected as of this date. (Read More)

Natural Gas Pricing


As of 10:12AM CST, April 2018, (the prompt month) Natural Gas was trading at $2.80, -$0.04 from one week ago and the 1-Year Spread average was $2.96, -$0.02 from one week ago.

Crude Oil Pricing

Crude hits $60! As of 9:34AM CST, April, 2018, (the prompt month) Light, Sweet Crude on the NYMEX was at $60.13, +$1.58 from one week ago.

Crude Oil Inventory

US crude inventories decreased by 9.6 million barrels to 439.5 million barrels for the week ended March 15th, according to data released yesterday morning by the US Dept of Energy. Traders in the Reuters poll projected an increase of 0.3 million barrels.

U.S. Rotary Rigs

U.S. Rotary Rigs drilling for natural gas were unchanged at 193 for the week of March 15th. The number of rigs currently drilling for Natural Gas was +4 from last year. US Rigs drilling for oil were -1 at 833. There are 33 more rigs targeting oil than last year. Canadian rigs were -28 at 161 for the week. Rigs targeting oil remain at 81% of all US drilling activity.

Geopolitical

Energy and research consultancy group Wood Mackenzie foresees a 14% growth in U.S. solar installations this year following a 2% dip in installations last year. Annual installations in 2018 totaled 10.6 GWdc
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Wood Mackenzie expects more than 12 GW of capacity to be installed this year, with a rebound in utility installations and continued growth in residential solar. Residential grew by 7% in 2018, and Wood Mackenzie sees California’s new home solar mandate as signaling “the next phase of solar market adoption.”

Starting next year, new California homes will be required to have solar photovoltaics installed. WM says long-term forecasts see an additional gigawatt of residential demand each year through 2024. The state is also considering a Solar Bill of Rights, which could make solar more enticing. CA topped state installation rankings, followed by Texas, North Carolina, Florida, and Nevada.

For the sixth straight year, solar was one of the top two sources of new electricity generating capacity in the U.S., only trailing natural gas. A recent solar jobs report was also bullish on long-term trends... (Read More)

Weather

The AccuWeather 1-5 Day Outlook forecasts a strange mix of temperatures for the US. The East Coast and a portion of the West are expected to be at below-normal temps, while the Northeast, the center of the country and Northwest are expected to be at normal or above-normal temps. The 6-10 Day Outlook forecasts a similar picture but with the Southeast at normal or above normal temps and the Northeast at below-normal or normal temps.

11-15 Day Outlook  forecasts the Northeast and Southeast at above-normal temps with the balance of the US at mostly normal temps, with the exception of the Dakotas, and some Western states. The 30-Day Outlook shows normal temps for the entire country, with the exception of the far Northwest and Florida, which are expected to be above-normal.

The 90-Day Outlook projects above-normal temps for the Northeast, Florida and Washington state,below-normal temps for the Dakotas and Nebraska and the balance of the country at normal temps. This weekend, severe thunderstorms and toronados are expected in the South-Central states.

Geopolitical

Energy and research consultancy group Wood Mackenzie foresees a 14% growth in U.S. solar installations this year following a 2% dip in installations last year. Annual installations in 2018 totaled 10.6 GWdc.

Wood Mackenzie expects more than 12 GW of capacity to be installed this year, with a rebound in utility installations and continued growth in residential solar. Residential grew by 7% in 2018, and Wood Mackenzie sees California’s new home solar mandate as signaling “the next phase of solar market adoption.”

Starting next year, new California homes will be required to have solar photovoltaics installed. WM says long-term forecasts see an additional gigawatt of residential demand each year through 2024. The state is also considering a Solar Bill of Rights, which could make solar more enticing. CA topped state installation rankings, followed by Texas, North Carolina, Florida, and Nevada.

For the sixth straight year, solar was one of the top two sources of new electricity generating capacity in the U.S., only trailing natural gas. A recent solar jobs report was also bullish on long-term trends...(Read More)

Sustainability and Renewables

Three Strategies to Develop Renewable Energy Projects on Potentially Contaminated Lands: Developing renewable energy on contaminated lands has proven to be both effective and cost-effective for companies pursuing a new solar or wind energy project. The utility-scale solar farm constructed on the 120-acre Reilly Tar & Chemical Corp Superfund site is a great example, and there are thousands more that are ripe for redevelopment.

Renewable energy continues to grow in volume and importance in the U.S. as corporations drive demand for sustainable energy, with 166 companies to date committing to go 100% renewable as part of a global initiative called RE100. At the same time, states and local governments are driving policy that prioritizes sustainable energy development. Two recent Illinois bills, the Path to 100 Act (HB 2966/SB1781) and Clean Energy Jobs Act (HB3624/SB2132), seek to incentivize the development of new renewable energy and move the state to 100% renewable energy by 2050. Other states, including California, New Jersey, New York, and Wisconsin, have called for or passed similar laws... (Read More)

This Week's Key Take-Away

As of March 13, the EIA has forecasted that dry natural gas production will average 90.7 billion cubic feet per day (Bcf/d) in 2019, up 7.4 Bcf/d from 2018 or an increase of 2,701Bcf annually. The EIA also expects natural gas production will continue to rise in 2020 to an average of 92.0 Bcf/d. This is great news if you are a consumer of Natural Gas or Electricity. Right?

However... the US is the world's largest consumer of Natural Gas, so offsetting the increase in production will be 2 key factors: While 2015, 2016 and 2017 were relatively flat in the use of Natural Gas, 2018 saw an increase of 7.3BCF/d or 2,665Bcf annually. If 2019 mirrors 2018 in increased usage, the increase in Natural Gas production in the US will not keep up with demand.

Secondly, much of the increase will come from Texas' Permian Basin and Eagle Ford shale regions. The pipelines are at capacity now with the exception of those heading to Corpus Christi to be converted into LNG for export. There are 11 more terminals that are either approved or under construction in Texas, Louisiana and Georgia