Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised that there was an injection of 98Bcf (billion cubic feet) into Underground Storage for the week ending September 28th, 2018.

This is 8Bcf above the median forecast of a 90Bcf injection, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. The injection one year ago was 42Bcf and the 5-year average injection is 84Bcf. Storage is 636Bcf below last year for the same week and 607Bcf below the 5-year average. Working gas in storage stands at 2,866Bcf.

Natural Gas Pricing


As of 9:34AM CST, November 2018, (the prompt month) Natural Gas was trading at $3.15, +$0.09 from one week ago and the 1-Year Spread average was $2.89, +$0.04 from one week ago.

Crude Oil Pricing


As of 9:21AM CST, November, 2018, (the prompt month) Light, Sweet Crude on the NYMEX was at $75.77, +$3.89 from one week ago.

Crude Oil Inventory


US crude inventories increased by 8.0 million barrels to 404.0 million barrels for the week ended September 29th, according to data released yesterday morning by the US Department of Energy. Traders in the Reuters poll projected an increase of 2.0 million barrels.

U.S. Rotary Rigs


U.S. Rotary Rigs drilling for natural gas were +3 at 189 for the week of September 28th. The number of rigs currently drilling for Natural Gas was the same as last year. US Rigs drilling for oil were -3 at 863. There are 113 more rigs targeting oil than last year. Canadian rigs were -17 at 178 for the week. Rigs targeting oil remain 82% of all US drilling activity.

Geopolitical


New NAFTA deal looks good for U.S. energy companies in Mexico, policy analyst says: While much of the attention of a new North American Free Trade Agreementcentered on provisions dealing with the auto and agricultural industries, a lesser-known portion of the pact looks to provide some much-needed certainty for companies like San Diego-based Sempra Energy that have spent billions on projects in Mexico.
“Mexico has come out of this with pretty strong protections for investors in the oil and gas sectors, as well as in telecom infrastructure, and that’s good news for the future of the energy reform,” said Duncan Wood, director of the Mexico Institute at the Washington D.C.-based Wilson Center. “That’s good news, even more so for those companies that have already invested in Mexico.” Put into effect in 1994, the original NAFTA did not include an energy chapter for Mexico.

Weather

The AccuWeather 1-5 day Outlook forecasts above-normal temps for the Eastern US with the the Western US at below-normal temps. The 6-10 Day Outlook sa similar forecast.

11-15 Day Outlook  forecasts most of the nation at below-normal temperatures with above-normal temps for the Northwest and Southeast. New England is projected to be at normal temps. The 30-day Outlook projects normal temps for most of the US with the exception of the Southeast coastal states and part of the West, which are expected to be at above-normal temperatures.

The 90-Day Outlook shows normal temps for the entire country, with the exception of the Northeast and Far-North Central States, which are expected to be above-normal.

The National Hurricane Center shows one Hurricane in the middle of the Atlantic which will pose no threat to the US. There is a large tropical storm in the Caribbean Sea.

Sustainability and Renewables


SPRINGFIELD, MA - Palmer Renewable Energy is planning a spring groundbreaking for the $150 million biomass energy plant it wants to build in East Springfield, an attorney representing the company said Monday. The move comes more than two years after the last time the wood-to-energy project was in the news and follows more than a decade of litigation, regulatory approvals and neighborhood protests.

Palmer Renewable Energy and its 35-megawatt plant will be a tenant on the Palmer Paving site at 1000 Page Blvd., said Frank P. Fitzgerald, a lawyer for Palmer Renewable Energy. Fitzgerald said the groundbreaking is set for spring after conferring with his clients.

This Week's Key Take-Away


The prompt month for Natural Gas prices opened at $3.25 this morning, the highest it has been this year. With today's large and larger-than-expected injection into Underground Storage, it has dropped $0.10. Spot prices for electricity have not reacted to the rise in Natural Gas prices yet but contract prices have risen significantly in the past few days with the weather forecast over the next several months. Only contracts for 36 months or longer remain at relatively low prices.

Crude prices are high as well, breaking through the $75 floor, although Russia and Saudi Arabia announced this morning that they will be producing more oil on a daily basis.



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