Diversegy Blog

Diversegy is always striving to give our clients resources to help make a proactive and smart decision on your energy; because energy, its what we do.

Here is early May’s market update:

Reasons to Buy:

• Structural demand is projected to continue increasing.
  • When you strip away the effects of the bearish weather we’ve experienced, the supply/demand balance easily flips to bullish.
• Moving into warmer months, projections of a hot summer (and anticipated cooling demand) will have an increasingly stronger influence.

Reasons to Wait:

• Current near-term forecasts continue to be mild (low heating and cooling demand for energy).
  • Market fell today amid cooler early summer forecasts.
• With natural gas production growth projected and significantly higher rig counts versus last year, the market could fall if incremental demand doesn’t show up.

Gas Market Highlights:

• Last week was the 3^rdstorage report and 3^rd injection of the 2016-17 Injection Season.  Injection (74 BCF) was in line with analysts’ expectations (67 – 78 BCF).  Storage is now 358 BCF below last year’s level and 299 BCF above the 5 year average.
  • Year over year deficit has decreased 2.7% since the previous week.
  • Surplus over 5 year average has increased 6.0% since the previous week.

June 2017 NYMEX trading at 3.231 after opening at $3.249

Weather Highlights:

• Next 7 days:
  • 1-6 below normal in the eastern US and 1-6 above normal in the West.
• Week following:
  • 1-3 degrees below normal in the Northeast and South.

Note:  Although natural gas does not necessarily indicate where electricity pricing is at, it is good as a general barometer for electricity markets as a whole. When gas gets expensive, so does electricity generated from natural gas.