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 9/13/19.

This is 6Bcf above the forecast of a 78Bcf injection, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. This compares with an injection of 86Bcf last year and a 82Bcf injection for the five-year average. Storage is 393Bcf above last year for the same week and 75Bcf below the 5-year average. Working gas in storage stands at 3,103Bcf. (Read More ...)

Natural Gas Pricing


As of 10:39AM CST, October 2019, (the prompt month) Natural Gas was trading at $2.55, -$0.02 from one week ago and the 1-Year Spread average was $2.54, -$0.03 from one week ago.

Crude Oil Pricing


As of 9:54AM CST, October, 2019, (the prompt month) Light, Sweet Crude on the NYMEX was at $58.58, +$3.56 from one week ago.

Crude Oil Inventory


US crude inventories increased by 1.1million barrels to 417.1 million for the week ended September 13th, according to data released yesterday morning by the US Dept of Energy. Traders in the Reuters poll projected a decrease of 2.5 million barrels.

U.S. Rotary Rigs


According to the Baker Hughes Count, US Rotary Rigs targeting Natural Gas were -7 at 153 for the week ending September 13th and -33 from last year. Rigs targeting Crude were -5 at 733. There are 134 fewer rigs targeting oil than last year. Canadian Rigs were -13 at 134 and -57 from last year. US Rigs drilling for oil move up 1% to 83% of all drilling activity.

Geopolitical


Yemen's Houthi rebels launched drone attacks on the world's largest oil processing facility in Saudi Arabia and a major oil field Saturday, sparking huge fires and halting about half of the supplies from the world's largest exporter of oil.

The attacks were the latest of many drone assaults on the kingdom's oil infrastructure in recent weeks, but easily the most damaging. They raise concerns about the global oil supply and likely will further increase tensions across the Persian Gulf amid an escalating crisis between the U.S. and Iran over its unraveling nuclear deal with world powers.  (Also read: US blames Saudi oil strikes on Iran)

The attacks resulted in "the temporary suspension of production operations" at the Abqaiq oil processing facility and the Khurais oil field, Energy Minister Prince Abdulaziz bin Salman said in a statement carried by the state-run Saudi Press Agency. The fires "were controlled," the statement said, and no workers were injured.

The fires led to the interruption of an estimated 5.7 million barrels in crude supplies, according to the statement, which said part of that would be offset with stockpiles. The statement said Saudi Aramco, the state-owned oil giant, would provide updated information in the next 48 hours. The Iranian-backed Houthis, who hold Yemen's capital, Sanaa, and other territory in the Arab world's poorest country, took responsibility for the attacks in the war against a Saudi-led coalition that has fought
(Read More ...)

Weather

The AccuWeather 1-5 Day Outlook forecasts above-normal temps for most of the Eastern 2/3 of the US with the exception of the Coastal states from Florida to Virginia.  The Western states are projected to be at  a mix of normal and below-normal temps.

The 6-10 Day Outlook forecasts above-normal temps for all of the Eastern 2/3 of the US with the exception of southern Florida. The West and North-Central states will be a mix of normal and below-normal temps with the exception of western California, which will be above-normal. 

The 11-15 Day Outlook forecasts above-normal temps for the eastern half of the country. The majority of the West will be at below-normal temps with the balance at normal temps. 

The 30-Day Outlook shows normal temps for most of the US except for parts of the Northwest, and a thin part of the Mid-Atlantic states, which are projected to be at above-normal temps.

The 90-Day Outlook shows above-normal temps for Washington state, with the balance of the country at normal temps. Severe Weather: Dangerous flash flooding is wreaking havoc in the Houston area with the remnants of Tropical Storm Imelda dumping massive amounts of rain overnight and into the morning. The severe weather prompted a full ground stop at Houston's Intercontinental Airport on Thursday morning.

Sustainability and Renewables


Lower costs and improved technology in wind and solar energy have helped the United States produce almost five times more electricity from renewable sources than it did a decade ago, according to a new analysis from an environmental advocacy group.

The Thursday report from the Environment Texas Research and Policy Center found the gains have been strongest in California, which has led the nation in solar energy production and in the industry’s growth over the past decade, and Texas, which dominates in wind energy.

Nationwide, wind power deployment has tripled since 2009, according to the report, “Renewables on the Rise — A Decade of Progress Toward a Clean Energy Future,” and the United States now produces more than 40 times as much solar power as it did a decade ago.

“I think the numbers show that thanks to a combination of good policy, good public investments, as well as just good market design, renewables and clean energy are no longer just a niche energy supply, but are part of the mainstream now,” Luke Metzger, head of the group behind the report, said in an interview.

The analysis cited strong policy support for solar energy in California as key to the industry’s success there, including the state’s Million Solar Roofs program launched in the mid-2000s with the help of $16 million in federal funding.
In Texas, a $7 billion electric transmission line upgrade completed in 2013 helped bring huge amounts of new wind power onto the state’s electric grid (Read More ...)

This Week's Key Take-Away


First, oil futures on Monday marked the sharpest daily rise in more than a decade after a weekend attack on major crude facilities in Saudi Arabia threatened to create a supply crunch.

West Texas Intermediate crude for October delivery gained 14.7%, or $8.05, at $62.90 a barrel, representing the largest daily gain for the most-active contract since Sept. 22, 2008, according to Dow Jones Market Data. That put the most-active oil contract at its loftiest level since May 21, 2019.

The price spikes in crude came after Saturday’s attack on Saudi Arabia’s Abqaiq plant and its Khurais oil field, which has thrown offline an estimated 5.7 million barrels of the kingdom’s crude oil production a day, equivalent to more than 5% of the world’s daily supply.

The Wall Street Journal, citing Saudi officials, have said a third of output would be restored on Monday, but a return to full production may take weeks, experts have said. This should have caused a spike in US natural Gas prices.

However, the second factor affecting Natural Gas and Electricity prices is tropical storm Imelda, which is still causing serious flash-flooding and demand destruction in south Texas.

The net result is that Natural Gas prices have actually dropped this past week, as the prompt month has dropped from a high of $2.80 earlier this week to $2.55 today. While President Trump has stated that he would tap into the US Strategic Petroleum Reserve to ensure that enough crude is available in the US, it is highly doubtful that this will be necessary.