The energy market is constantly keeping us on our toes. Make sure to lock in your deals today before these rates disappear. Here is early July’s energy market update:
Reasons to Buy:
- Weather normalized demand continues to grow.
- Both takeaway capacity from the Northeast and LNG export capacity are increasing.
- Now that we’re in the warmer months, cooling demand will have an increasingly stronger influence.
Reasons to Wait:
- Current forecasts for average summer temps may keep 5 year surplus intact heading into winter.
- Bigger gas markets towards Southeast and Middle Atlantic had cooler than normal temperatures last week.
- With natural gas production growth projected and significantly higher rig counts versus last year, the market could fall if incremental demand doesn’t keep up.
- 189 gas rigs (+5 this week) vs. 88 gas rigs last year.
Gas Market Highlights:
- This week was the 13th storage report and 13th injection of the 2017 Injection Season. Injection (72 BCF) was above analysts’ expectations (54-68). Storage is now 285 BCF below last year’s level and 187 BCF above the 5 year average.
- Year over year deficit has decreased 10.6% since last week.
- Surplus over 5 year average has increased 3.3% since last week.
- August 2017 NYMEX trading at 2.854 after opening at $2.899.
- Next 7 days:
- 1-2 below normal for the East, 1-6 above normal in the West.
- Week following:
- 1-6 above normal in the Central US, normal temperatures in the Southeast.
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.