Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised that there was a withdrawal of 59Bcf from Underground Storage for the week ending November 23d, 2018.

This is 18Bcf below the median forecast of a 77Bcf withdrawal, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. The withdrawal compares with -33Bcf last year and -49Bcf for the five-year average. Storage is 644Bcf below last year for the same week and 720Bcf below the 5-year average. Working gas in storage stands at 3,054Bcf. The December Natural Gas contract closed at $4.72, the highest monthly close of the year.

Natural Gas Pricing


As of 10:00AM CST, January 2018, (the new prompt month) Natural Gas was trading at $4.53, -$0.16 from one week ago and the 1-Year Spread average was $3.20, -$0.17 from one week ago.

Crude Oil Pricing


As of 9:30AM CST, January, 2018, (the new prompt month) Light, Sweet Crude on the NYMEX was at $51.32, -$2.96 from one week ago.

*Note that Crude recovered after dropping below $50 a barrel this morning, subsequent to reports that Russia plans production cuts in tandem with OPEC.

Crude Oil Inventory


US crude inventories increased by 3.6 million barrels to  450.5 million barrels for the week ended November 23d, according to data released this morning by the US Department of Energy. Traders in the Reuters poll projected an increase of 0.8 million barrels.

U.S. Rotary Rigs


U.S. Rotary Rigs drilling for natural gas were unchanged at 194 for the week of November 23d. The number of rigs currently drilling for Natural Gas was +18 from last year. US Rigs drilling for oil were -3 at 885. There are 138 more rigs targeting oil than last year. Canadian rigs were +7 at 204 for the week. Rigs targeting oil remain 82% of all US drilling activity.

Geopolitical


Air Liquide will begin building a $150m liquid hydrogen production plant in the western US early in 2019: It will be the first world scale liquid hydrogen production unit dedicated to the hydrogen energy markets and have a capacity to produce nearly 30 tonnes of hydrogen per day, which can fuel 35,000 Fuel Cell Electric Vehicles (FCEVs).

Air Liquide has signed a long-term agreement with FirstElement Fuel Inc (FEF), a leader in retail hydrogen infrastructure in the US, to supply hydrogen to FEF’s retail liquid hydrogen fuelling stations in California. There are 35 hydrogen fuelling stations operating in California, with 29 others to follow, according to the California Fuel Cell Partnership. Air Liquide will be able to provide a reliable supply solution to fuel the 40,000 FCEVs expected to be deployed in the state of California by 2022 with this investment.

Weather

The AccuWeather 1-5 day Outlook forecasts above-normal temps for the most of the US with the exception of the Western third and East Coast, which will be mostly at normal temps. The 6-10 Day Outlook forecasts all of the US at below-normal temps with the exception of the Southeast, which will be at normal temps and Florida at above-normal. The balance of the country will be at either normal or above-normal temps.

11-15 Day Outlook  forecasts the East Coast and part of the West at below-normal temps with the balance of the US at normal.temps or above-normal temps. The 30-day Outlook projects normal temps for almost all of the US except the far North Central area and below-normal temps for most of New England. The 90-Day Outlook projects the most of the country at normal temps with the exception of the Northwest, which is expected to be at above-normal temps.

There is no tropical storm activity in the Atlantic Ocean at this time. Hurricane season officially ends this Friday.Weather

The AccuWeather 1-5 day Outlook forecasts above-normal temps for the most of the US with the exception of the Western third and East Coast, which will be mostly at normal temps. The 6-10 Day Outlook forecasts all of the US at below-normal temps with the exception of the Southeast, which will be at normal temps and Florida at above-normal. The balance of the country will be at either normal or above-normal temps.

11-15 Day Outlook  forecasts the East Coast and part of the West at below-normal temps with the balance of the US at normal.temps or above-normal temps. The 30-day Outlook projects normal temps for almost all of the US except the far North Central area and below-normal temps for most of New England. The 90-Day Outlook projects the most of the country at normal temps with the exception of the Northwest, which is expected to be at above-normal temps.

There is no tropical storm activity in the Atlantic Ocean at this time. Hurricane season officially ends this Friday.

Sustainability and Renewables


Wind power is limited in part by how expensive it can be to make each turbine. You may need roughly a ton of rare earth metals per machine... and that adds up. It could soon be much less expensive, however. The EU-backed EcoSwing project recently upgraded a wind turbine in Denmark with superconducting tape that reduces the required amount of rare earth elements to as little as 1kg (2.2lbs). That not only dramatically reduces the costs (down from $45.50/kg to $18.70/kg), it reduces weight and size requirements. You can produce the same power for about half the weight and volume of a conventional turbine, the University of Twente's Marc Dhalle told Chemistry World.

The tape is made using a ceramic superconducting layer with gadolinium-barium-copper oxide, with a steel ribbon at its back and protection against metal poisoning through layers of magnesium oxide and silver. And cooling isn't an issue -- the EcoSwing team used the same sort of cryo-cooling you normally see in MRI scanners.

This Week's Key Take-Away


November has been colder than average for much of the U.S. but a shift in the jet stream will bring milder temperatures to start December. That said, this break from the cold will be short-lived, so don’t get used to the warm temperatures.
The combination of a low-pressure system that will quickly track across the South and off the East Coast early next week will bring the return of colder-than-average temperatures in the central and eastern U.S. By next Tuesday or Wednesday, cooler-than-average conditions will return to much of the contiguous U.S. Temperatures are likely to flip back and forth from mild to cold in the Eastern United States during much of December.

Electric wholesale prices are expected to remain relatively low, with the exception of the Mass Hub and California. In California, the storage of Natural Gas continues to be a major issue, 3 years after the major leak at  Aliso Canyon and Massachusetts still suffers from a lack of pipelines into the state.


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