Natural Gas, Crude Oil and Commercial Electricity Rates

Natural Gas

After seeing gas last week at 3.90/MMBtu, which was a 12 cent increase from previous week, natural gas spiraled down toward the 3.60/MMBtu mark. A .30 cent drop marks the most gas has fallen in a week over the past 2 months. This is quite the opposite reaction most analyst predicted, especially after seeing the market become bullish. The July contract closed at 3.80/MMBtu today, and the August contract will be up next for the market to value. After this large drop off and storage receiving high injections again, the outlook on the market looks bearish. Storage currently is at 2533 Bcf . This is a 95 Bcf increase, and a higher injection than the previous week. The East received the highest injection of the regions once again. Storage is below 2012’s levels, but still remains within the 5 year  historical average.

 

Crude Oil

Crude Oil continues to stay around $96/barrel, with a high point of $97/barrel this week and a low of $95.18/barrel. With a neutral market outlook for the week, producers are hopeful that with the news the stimulus package will continue to provide help to put the market above $100/barrel once again. According to a report on Bloomberg, the U.S. economy may not yet be done recovering from the market crash despite being well above where it was prior to the economic downturn. What does this have to do with oil? Enough to subside a bearish oil market. When reports began coming out that the Fed was expected to cut back on the stimulus plan, crude oil began to feel the effects price wise. It began a downward spiral from above $110/barrel to prices now nearing $90/barrel. Prices don’t all depend upon this stimulus package but news of this plan lasting longer created a more stable market. Prices are expected to fall due to demand, but not as drastically as once previously thought due to ongoing effects of the current stimulus package.

 

Commercial Electricity Prices

ERCOT – Prices range between .04 – .07 cents

NYISO – Rates were seen between .05 – .09 cents

MISO –  Prices range between .03 – .06 cents

PJM – Rates were seen between .04 – .07 cents

 

Weather

The upcoming days will be warmer than normal for the West, experiencing an increase in temperature between 2 -4 degrees warmer. The South and Midwest will be experiencing a cooler temperature than usual, ranging from 2 – 6 degrees cooler. The holiday week will provide the same relief for the Midwest, as for the South, it should remain neutral. The East coast looks to be neutral all week. The West wont catch any breaks this upcoming week, showing signs to continue to get warmer.

 

Other News

According to several senior analyst, there is a high possibility of a new monthly peak to be set not only today, but soon to be broken tomorrow. The projected peak load is expected to rise above 64,000. As of Tuesday (6/25), the month to date peak load was above 61,000. This could cause problems later this year. ERCOT was the only  region to be well below the the targeted reserve levels. High temperatures along with unexpected power failures could create a problem few want to deal with. With a higher than supply, ERCOT could experience rolling blackouts unless the power demand decreases which is highly unlikely. (Note – image was created June 26th, therefore the 27th and 28th are not actual figures)

As of Wednesday, the projections for Thursday (6/27) and Friday (6/28) will be all time highs
As of Wednesday, the projections for Thursday (6/27) and Friday (6/28) will be all time highs

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