Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised today that there was an injection of  84Bcf into Underground Storage for the week ending 8/30/19.

This is 3Bcf above the forecast of a 81Bcf injection, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. This compares with an injection of 64Bcf last year and a 66Bcf injection for the five-year average. Storage is 383Bcf above last year for the same week and 82Bcf below the 5-year average. Working gas in storage stands at 2,941Bcf. (Read More ...)

Natural Gas Pricing


As of 12:57PM CST, October 2019, (the prompt month) Natural Gas was trading at $2.43, +$0.20 from one week ago and the 1-Year Spread average was $2.48, +$0.07 from one week ago.

Crude Oil Pricing


As of 9:02AM CST, October, 2019, (the prompt month) Light, Sweet Crude on the NYMEX was at $56.74 +$1.53 from one week ago.

Crude Oil Inventory


US crude inventories decreased by 4.8 million barrels to 423.0 million for the week ended August 30th, according to data released yesterday morning by the US Dept of Energy. Traders in the Reuters poll projected a decrease of 2.3 million barrels.

U.S. Rotary Rigs


According to the Baker Hughes Count, US Rotary Rigs targeting Natural Gas were unchanged at 162 for the week ending August 30th and -22 from last year. Rigs targeting Crude were -12 at 742. There are 120 fewer rigs targeting oil than last year. Canadian Rigs were +11 at 150 and -78 from last year. US Rigs drilling for oil remain at 82% of all drilling activity.

Geopolitical


Energy consumption in the United States reached a record high of more than 101 quadrillion British thermal units (quads) in 2018, barely surpassing the previous high recorded in 2007 by less than 0.3%. The U.S. Energy Information Administration (EIA) has redesigned its U.S. energy consumption by source and sector chart to separate the electric power sector from the four end-use sectors. The new chart shows electricity retail sales to each end-use sector and the amount of electrical system energy losses within the electric power sector from generation, transmission, and distribution of electricity.

Since 1950, the electric power sector—which both consumes and produces energy—has been responsible for some of the largest changes in U.S. energy consumption. In 2018, the electric power sector consumed 38 quads of energy and provided 13 quads of electricity retail sales to the residential, commercial, industrial, and transportation sectors.

Nearly two-thirds of the energy that the power sector consumes (25 quads in 2018) is lost before it reaches end users. Most of these losses occur at steam-electric power plants (conventional and nuclear) when heat energy is converted into mechanical energy to turn electric generators. Other losses include the electricity used to operate power plants and the electricity lost in the transmission and distribution of electricity to end users (Read More ...)

Weather

The AccuWeather 1-5 Day Outlook forecasts above-normal temps for most of the Western US, as well as the Southeastern quarter of the US except for the East Coast. The Northeast and North-Central states are projected to be at  below-normal temps, with normal temps for the balance of the country.

The 6-10 Day Outlook forecasts above-normal temps for the much of the center of the country with the entire East Coast at normal temps. The West and North-Central states will be a mix of temps. 

The 11-15 Day Outlook forecasts above-normal temps for Eastern half and much of the Western US. The Center of the country will be at normal temps. 

The 30-Day Outlook shows above-normal temps for Northwest and the Eastern third of the US except for Florida, with the balance of the country at normal temps.

The 90-Day Outlook shows above-normal temps for the Far-Northwest, with the balance of the country at normal temps.

Severe Weather: Life-threatening storm surge and dangerous winds are expected along portions the coasts of South Carolina and North Carolina, and portions of southeast Virginia and the southern Chesapeake Bay, regardless of the exact track of Dorian's center. Water levels could rise well in advance of the arrival of strong winds.

Sustainability and Renewables


What Keeps Energy Leaders Up at Night? It’s More About Climate Change Than You May Think: This year, it seems hardly a week has gone by without a new report making us even more nervous about climate change. It’s as if the editorial theme for 2019 was: “It’s worse than you thought.”

Maybe this is part of an effort to bring home what many find difficult to grasp because it is happening in slow motion. The idea that sometime in the future the world’s ice sheets will collapse, shorelines will crumble, summers will get hotter, and species will go extinct is more difficult to take to heart and respond to than the idea that we may all be dead soon.

The United Nations (UN) said this year we have 12 years left to act. Then, the Breakthrough National Centre for Climate Restoration, an Australian think tank, came out with an even more shocking report, which says there’s a good chance that it will all be over for human society by 2050. The model the UN Panel on Climate Change used last year that forecast a 2-degree-C rise in global temperature was too conservative, its authors said. Their most-extreme scenario has global temperature increasing 3C in the next 30 years as a direct result of governments ignoring the science and doing almost nothing. Such reports have one message in common, that is, we must act and act now to address the manmade driver of global warming (Read More ...)

This Week's Key Take-Away


The image above is Hurricane Dorian's projected path as of 8AM this morning. Due to widespread damage on land along the East Coast, we have already seen significant demand destruction as power lines and generation have been impacted.

More demand destruction is expected, as is curtailment of generation as the storm progresses up the East Coast. Natural Gas pricing on the NYMEX has risen by $0.20 over the past week but was unchanged today. We expect to see a downturn in Natural Gas prices unless there are other weather or geopolitical issues come into play.

Tropical storm watches and warnings have now been issued for most of the East coast, including tornado warnings all the way to parts of southeast Massachusetts. The eyewall containing the strongest winds in Dorian is very close to the South Carolina coast. Just before 2 p.m. EDT, the eye was only about 25 miles from the mouth of Charleston Bay..Had the storm instead continued in a straight path through Florida and gone into the Gulf of Mexico, we would have seen the price of Natural Gas go up swiftly, due to the shut-in of wells in the Gulf and possibly the shut-down of Henry Hub in Louisiana, where Natural Gas enters the pipline system.