Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised that there was a withdrawal of 18Bcf (billion cubic feet) from Underground Storage for the week ending April 20th, 2018.

This is 1Bcf above the median forecast of a 17Bcf withdrawal, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. The injection one year ago was 74Bcf and the 5-year average injection is 60Bcf. Storage is 897Bcf below last year for the same week and 527Bcf below the 5-year average. Working gas in storage stands at 1,281Bcf.

Natural Gas Pricing

As of 9:32AM CST, May 2018, (the prompt month) Natural Gas was trading at $2.81, +$0.04 from one week ago and the 1-Year Spread average was $2.90, +$0.01 from one week ago.

Crude Oil Pricing

As of 8:45AM CST, May, 2018, (the prompt month) Light, Sweet Crude on the NYMEX was at $68.46, -$0.45 from one week ago.

Crude Oil Inventory

US crude inventories increased by 2.1 million barrels to 429.7 million barrels for the week ended April 20th, according to data released yesterday morning by the US Department of Energy. Traders in the Reuters poll projected a decrease of 2.2 million barrels.

U.S. Rotary Rigs

U.S. Rotary Rigs drilling for natural gas were unchanged at 192 for the week of April 20th. The number of rigs currently drilling for Natural Gas was 25 higher than last year’s level of 167.  US Rigs drilling for oil were +5 at 820. There are 132 more rigs targeting oil than last year. Canadian rigs were -9 at 93 for the week. Rigs targeting oil remain at 81% of all US drilling activity.

Geopolitical

Energy Department Predicts How Extreme Climate And Weather Will Disrupt US Energy Systems: The Department of Energy (DOE) has just released their state of the art model built to predict how climate change and weather will impact energy systems here in the United States.

There is no other governmental agency more eager to understand how encroaching seas, category 5 hurricanes, and heat waves will impact energy consumption and potentially energy strain on the US energy system.

Weather

The AccuWeather 1-5 day Outlook forecasts below-normal temps for the Eastern half of the US with the exception of the East Coast, with the  balance of the country at above-normal or normal temps. The 6-10 Day Outlook forecasts the most of the North at above-normal temps with most of the South at normal temps, with the entire Western US at above-normal temps. The 11-15 Day Outlook forecasts the Northeast at above-normal temps, with the balance of the country at below-normal or normal temps. The 30 and 90-day Outlook projects mostly normal temps for most of the US.

Sustainability and Renewables

Nanoparticle Breakthrough Could Capture Unseen Light for Solar Energy Conversion: An international team of scientists has demonstrated a breakthrough in the design and function of nanoparticles that could make solar panels more efficient by converting light usually missed by solar cells into usable energy.
The team, led by scientists at the U.S. Department of Energy’s Lawrence Berkeley National Laboratory (Berkeley Lab), demonstrated how coating tiny particles with organic dyes greatly enhances their ability to capture near-infrared light and to remit the light in the visible light spectrum, which could also be useful for biological imaging.

This Week's KeyTakeaway

As we enter our 4th and probably last week of declining inventory of Natural Gas from Underground Storage during the (so-called) injection season, Natural Gas prices continue to rise - although still trading in a narrow band. With the latest forecasts showing warmer weather, especially in the Northeast, we should see Natural Gas prices recede somewhat. Bear in mind that we are still well below $3.00 for both the prompt month and one-year spread, so prices already are in the low end of the historical spectrum.

We will have a narrow window before summer Heat Rates begin to rise nationally to lock in electricity prices. Texas, of course has already seen a huge spike in Heat Rates, due to coal generator closures.