Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised that there was an injection of 70Bcf (billion cubic feet) into Underground Storage for the week ending August 24th, 2018.

This is 5Bcf above the median forecast of a 65Bcf injection, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. The injection one year ago was 30Bcf and the 5-year average injection is 59Bcf. Storage is 646Bcf below last year for the same week and 588Bcf below the 5-year average. Working gas in storage stands at 2,505Bcf. The September Natural Gas contract closed at $2.90.

Natural Gas Pricing


As of 9:33M CST, October 2018, (the new prompt month) Natural Gas was trading at $2.85, -$0.10 from one week ago and the 1-Year Spread average was $2.81, -$0.09 from one week ago. US Lower 48 production reached another all-time high yesterday at 83.1 Bcf/d.

Crude Oil Pricing

As of 8:58AM CST, October, 2018, (the new prompt month) Light, Sweet Crude on the NYMEX was at $69.66, +$4.64 from one week ago.

Crude Oil Inventory


US crude inventories decreased by 2.5 million barrels to 405.8 million barrels for the week ended August 24th, according to data released yesterday morning by the US Department of Energy. Traders in the Reuters poll projected a drop of 1.5 million barrels.

U.S. Rotary Rigs


U.S. Rotary Rigs drilling for natural gas were -4 at 182 for the week of August 24th. The number of rigs currently drilling for Natural Gas was 2 higher than last year’s level of 180.  US Rigs drilling for oil were -9 at 860. There are 101 more rigs targeting oil than last year. Canadian rigs were +17 at 229 for the week. Rigs targeting oil remain 82% of all US drilling activity.

Geopolitical


Global LNG Dynamics And the Outlook For U.S. Natural Gas: American LNG exports are expected to nearly triple over the next 12 months. This implies a large boost to overall demand for U.S. natural gas supply with LNG exports accounting for 10% of overall demand by 2020.

Long-term natural gas production projections point to the need for more LNG export capacity. Fortunately growing global demand for LNG will likely absorb any new export capacity in the U.S. built in the next decade.

LNG export facilities able to secure natural gas resources close to the U.S. Gulf may have a competitive advantage in delivering LNG into the European market.

A number of new liquefaction plants are scheduled to begin operation over the next 12 to 18 months in the U.S., which could eventually see LNG exports account for roughly 10% of total U.S. demand.

Weather

The AccuWeather 1-5 day Outlook forecasts above-normal temps for the East Coast, with the exception of The Southeast, as well as the Central states. Normal temps are forecast for the Western third of the US. The 6-10 Day Outlook shows above-normal temps for the Northeast quarter of the  US, and a small circle of the West. Normal temps are forecast for the balance of the country.

11-15 Day Outlook forecasts above-normal temps for the Northwest, below-normal temps for the center of the country and normal temps for the balance.The 30-day Outlook projects normal temps for most of the US with the exception of the Northeast and Northwest, which are expected to be at above-normal temperatures.

The 90-Day Outlook shows a similar picture. There is a tropical storm with an 80% chance of becoming a hurricane off the coast of Africa.

Sustainability and Renewables


Latest breakthrough in lithium-oxygen technology brings more powerful rechargeable batteries one step closer to reality: The key to longer-range electric cars, smartphones that last several days without charging, and long-term storage of renewable energy that could be used on demand by the grid may be the lithium-oxygen ― also known as lithium-air ― battery. These batteries have the potential to store ten times more power than currently used lithium-ion versions.

A new breakthrough in lithium-oxygen battery technology reported on 23 August in Science has brought the technology a step closer to reality.  According to a briefing in Science, these lithium-oxygen batteries “could one day underpin a green energy grid, storing excess wind and solar power and delivering it on demand.”

Lithium-oxygen batteries work in a similar way to their lithium-ion counterparts. Essentially, the batteries alternate between charge and discharge cycles, during which lithium ions flow through two charge-storing electrodes separated by an organic liquid electrolyte.

This Week's Key Take-Away


A third coal-powered electricity generator has closed in Texas this year. Following is an interesting Dallas Morning News Article:
ROCKDALE, TX — David Montelongo isn’t used to being alone. He's spent his 60 years in the Central Texas town of Rockdale, surrounded by family and working the last 39 years in the local coal mine. He has a wife, three grown children, eight grandchildren and many other relatives in this town of 5,600.
Now, his days are lived on the road and at a West Texas oil field, where he is a supervisor. "All I do is go home, sit in an apartment and wait for the morning to come," Montelongo said.

His time in an overpriced one-bedroom Odessa apartment is mostly quiet as he counts the weeks until he can visit his family in Rockdale and the years until retirement. The closing of the coal-fired Sandow power plant and the mine that fed it — widely seen by outsiders as another gasp of a dying industry — forced Montelongo to find work six hours away from his family.


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