There hasn’t been much of a change in factors affecting the market since last week. Weather remains relatively mild. Most of the northeast is experiencing fall-like weather where cooler temperatures came a little earlier than usual. Production remains high – helping us fill the deficit from this winter. The storage is now more than 50% fuller from when the injection season began in April. From the week ending September 5, injections have totaled 1,979 Bcf versus 1,554 Bcf for the same 23 weeks in 2013 (EIA). This report week’s injection surpassed the market expectations and both the one and five year averages. We are left with 8 weeks in the injection season to continue filling the gap from last year’s harsh winter.Read More
The overall mild summer remains a large driver on gas costs, especially as record production overwhelms demand. According to a Wall Street Journal article, WSI is predicting two cool weather patterns to hit the country in the next two weeks and the central US is expected to experience fall-like weather. WSI’s forecast for September indicates moderate temperatures for most regions.
The natural gas storage injection of 79 Bcf was above expectations of 74 Bcf which helped gas prices fall following the release of the report. This week’s injection also continued the trend of being larger than both the one and five year average injections. Nine weeks remain in the injection season.
August has been a relatively mild month across most of the central and eastern US. We are quickly approaching September and forecasts indicate cooler-than-normal temperatures for most of the north-central US. WSI predicts this same pattern for a majority of the fall and indicates that the data needed to make a successful winter forecast is not yet available. The first official winter forecast will be available in September.
The natural gas injection was 75 Bcf, below expectations of 76 Bcf, causing prices to rise briefly immediately following the report. Some analysts predicted up to a 78 – 80 Bcf injection. 2014 has been the strongest injection season in the past six years but storage still remains 15.7% below the levels last year.
High production numbers have assisted in reducing the storage deficit due to extreme weather by more than 50% since the beginning of injection season. Forecasts indicate strong injection numbers will continue and the EIA predicts storage to sit at 3,460 Bcf by the end of injection season (October 31).Read More
Overall mild weather this summer has helped US natural gas production achieve record levels, curtail natural gas demand in the power sector and support large, ongoing natural gas injections.
Gas production continues to break records. US dry natural gas production hit a high of 69.3 Bcf on July 30 and reached the same level again a few times this month.
NOAA is predicting that weather will remain mild in the Midwest and Northeast portions of the United States. The Southern part of the nation and California area can expect above normal temperatures through the end of the month.
This report week’s injection was 88 Bcf – surpassing the expectation of 82 Bcf as well as last year’s 58 Bcf build and the 5-year average build of 48 Bcf. This was the 18th straight injection beating the 5-year average injections. Again, the mild weather is helping support the large injections we continue seeing each week. Bentek Energy’s injection forecast for the next three weeks is 87, 82 and 76 Bcf.Read More
Oncor’s billing rates are made up of several different components. One of them, the Transmission Cost Recovery Factor or TCRF, is a charge passed through to all retail customers connected to Oncor’s transmission or distribution system. The charge is updated across each September and March and most customers will see a line item for this on their bill.
In September 2013, the charge for customers with secondary, greater than 10 kW, IDR meters paid $2.778674 per 4CP kW. In March, the charge increased by 26.56% or nearly 74 cents. The most recent charge of $3.516757 per 4CP kW will likely increase again in September.
For larger customers, this could be a decent price increase on TDSP charges and/or power factor penalties.
See below for an example of how the charges have increased since March 2013:
Please let us know if you have any additional questions around this increasing charge. Visit page 106 of the Oncor tariff to see how the charges have changed over the years.Read More
As we all know, the abundant natural gas supply the United States has discovered has helped make natural gas prices decrease. In turn, natural gas has become an attractive alternative motor fuel.
Especially popular in Texas, compressed and liquefied natural gas sales accounted for nearly $2.2 million in tax revenue in the first half of 2014. In order to encourage use of the fuel, Texas changed its taxing structure on compressed natural gas to make it a more attractive option for station operators.
According to the Department of Energy, compressed natural gas (used to fuel vehicles) sold for $2.15 per the gasoline equivalent in April. This is approximately $1.50 per gallon cheaper than gasoline.
Natural gas fueling stations are more expensive to build than a gasoline fueling station and availability remains sparse. There are 51 public compressed natural gas fueling stations in the state of Texas – mainly clustered in the Dallas and Houston area.
According to the National Oceanic and Atmospheric Administration, above normal temperatures are expected for the eastern half of the United States through next week. Temperatures in the Midwest are expected to remain normal to above normal in most areas. CenterPoint Energy also noted that forecasts are predicting the last half of August to be warmer than what was anticipated originally.
Due to the lack of cooling demand overall consumption decreased by 0.2%. The largest decline in power burn was in the Midwest, at 27.6%. Supply continues increasing due to record production numbers. The EIA released an updated Short Term Energy Outlook and expects production in 2014 to grow by 5.3% compared to last year. Above weekly storage injections have raised the projected end of injection season inventory to 3,460 Bcf.
Storage still stands 17.7% less than it did last year despite the record injections we continue seeing each week. Though the projected end of injection season inventory was raised, it still stands below the five-year average peak storage value of 3,851 Bcf. In order to reach the five-year peak weekly injections would need to average 114 Bcf/week. So, until the storage gap is filled it remains a bullish factor.Read More
According to Bentek Energy, natural gas production rose by 0.5 Bcf/day during the month of July versus June. On July 30, production set a one day record high of 69.3 Bcf/day, surpassing the previous record in June.
“The U.S. has moved past 68 Bcf/d and we’re now talking about what day production will surpass 70 Bcf/d,” said Jack Weixel, Bentek director of energy analysis. He added that 70 Bcf/day in production would calm most fears about depleted storage levels going into winter.
Please see the Platt’s article here.Read More
The US Department of Energy announced in May changes to the process for approving liquefied natural gas export facilities. Now, the DOE will only issue final rulings after the Federal Energy Regulatory Commission (FERC) has completed an environmental review of the project.
The FERC process costs companies up to $100 million to complete, while the export application with the DOE costs about $20,000. This new rule will shift focus away from the DOE and onto FERC.
This policy will not affect companies that have already received conditional approvals but does affect Cheniere’s Corpus Christi project. The project is due to receive its final environmental review in October. From there – they will seek DOE approval.
For more information, please see the Reuters article here.Read More