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All About Energy

Winter is coming... but nothing cool is happening.

JB Sowyrda Dec 3, 2015 2:05:40 PM
JB Sowyrda
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Working Gas Storage

Working natural gas storage fell below expectations to 3,956 Bcf, a net 53 Bcf decrease as compared to the previous week.

Gas storage surplus is now at 15.9% as compared to the same period last year and still remains above the five-year average (3,709 Bcf).

So what is the situation with natural gas right now?

We've got record high storage numbers, steady production levels, warmer-than-usual temperatures so prices are currently low.

Are these prices sustainable?  Personally, I'd take the potential downside risk off the table and lock in long-term savings now while continuing to monitor the market for additional pricing upside at a future date.

 

6-10 Day Weather Outlook as of December 2, 2015

2015.12.02_-_NOAA_610.jpgEl Niño continues to influence North American weather patterns and has December off to a warm start. The prolonged higher than average temperatures in the North East and Mid-West has reduced heating related demand, putting downward pressure on prices.

What does this mean?  If similar temperatures continue into January, we could possibly see natural gas prices in the northeast dipping below the $2.00 mark.

 

Spot prices are still pretty low.Natural Gas Prices at the Henry Hub (HH)

Spot prices continue to drop, even dipping below $2.00/MMBtu at one point before the market rallied to bring it back up.

  • NYMEX NG prompt contract fell to $2.165
  • Jan16 natural gas contract is down to $2.14
  • Jan16 crude is at $40.68.
  • 12 month strip is at $2.404

 


ERCOT CDR expected to increase at least 15%+ through 2025

ERCOT_CDR_Margins.png

ERCOT has revised 2016-2025 reserve margins to accurately reflect the anticipated increase in Reserve Margins through 2025.

Resource adequacey is an important component to maintaining grid stability.  ERCOT works to keep enough electric generation to meet demand levels. 

Back in May, ERCOT reported on the projected capacity, but following October's 2016 Long Term Load Forecast, it was determined that demand would likely increase 15%+ in 2016 and beyond.

 

ERCOT files 2015 Four Coincidental Peaks (4CP)

ERCOT system has filed the June, July, August, and September 2015 Four Coincident Peaks (4CP).  The 2015 4CP dates were June 10, July 30, August 10, and September 8, 2015.

 


  

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Topics: ERCOT CDR, 4CP, Natural Gas