Energy News

August 28th, 2015

Executive Market Summary

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Natural Gas storage injections have been alternating between bearish and bullish over the past few weeks. Injections are bearish compared to last week. The surplus now sits at 18.3% higher than last year and 2.9% higher than the 5-year average. September production growth is expected to slow and is down 2.4% from August, slowest growth seen since 2013.

The 2018-19 PJM Base Residual Capacity auction results are finally in which were originally expected in May this year.   The delay was to accommodate the new capacity performance requirements for 80% of power to be available 24/7/365. Prices fell within market expectations and overall prices are up 37.3%.

Short-Term Drivers

  • Storage Injection
  • Natural Gas Production
  • Economy

 

Long-Term Drivers

  • PJM capacity auction results
  • ITR trends report
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August 21st, 2015

Executive Market Summary

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Storage finally crossed the 3 Tcf threshold for the year and sit 19% higher than the same week last year and 2.7% higher than the five-year average. This week’s 53 Bcf storage injection continued a pattern seen over the past couple months of mostly smaller injections. Since June, injections have averaged less than 24 Bcf/d less than last year, indicating that the oversupply bubble, may be starting to lose some air.

Also in the news this week, new proposals under the President’s Climate Action Plan, are a key component to achieve the EPA’s goal to cut methane emissions from the oil and gas sector by 40 – 45% from 2012 levels by 2025. The EPA estimates emissions will rise 25% over the next decade if steps aren’t taken to cut them. – EPA

Short-Term Drivers

  • Storage Injection
  • Increased Consumption
  • Heat Wave

Long-Term Drivers

  • Methane Emission Regulation
  • Pipeline Project Updates
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August 14th, 2015

Executive Market Summary

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The storage injection this week came in at a bearish 65 Bcf, or 12% above the consensus expectations. Storage levels now sit 21% above last year and 3% above the five-year average. These injections, despite warmer temperatures, have been led by strong natural gas production, up 4% year-over-year.

The August ITR Economic Trends Report kept its forecast for natural gas relatively unchanged. Expect depressed prices to continue into the winter, but then to rebound along with the overall economy in Q12016. Natural Gas is currently trading at rock-bottom prices from a historical perspective and the ITR Report recommends locking in those prices now, “to create a low-cost competitive advantage prior to the 2016-2017 upswing in the business cycle.”

Short-Term Drivers

  • Storage Injection
  • Consumption Decrease
  • Power Burn Decrease

Long-Term Drivers

  • ITR Economic Trends Forecast
  • Clean Power Plan
  • Pipeline Projects
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August 7th, 2015

Executive Market Summary

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Natural Gas storage levels closed the gap this week between the 1-year and 5-year averages, but still sit 23%, and 2% higher, respectively. Driving prices up is the heat wave occurring across most of the country and especially the ERCOT region, where record electric generation levels were reached on Wednesday and Thursday. Also of note, regulation has pushed back key dates to meet certain compliance standards for the Clean Power Plan.

 

Short Term Drivers

  • El Nino Conditions
  • Record Power Burn
  • Storage Oversupply

Long-Term Drivers

  • Clean Power Plan Revisions
  • US Exports to Mexico New Forecasts
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July 31st, 2015

Executive Market Summary

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This week’s storage injection came in 1 Bcf under the consensus expectations.  This would normally be bullish, but with storage levels higher than last year and slow economic conditions the market saw natural gas prices drop slightly.

Short Term driver-Bearish market

  • Natural Gas storage levels
  • 2nd Quarter GDP growth

Long Term Drivers

  • Clean Power Plan resistance
  • Pipeline Construction
  • EPA Regulation
  • LNG Export Projects
  • Natural Gas Exports to Mexico
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July 24th, 2015

Executive Market Summary

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With this week’s storage injection slightly above expectations after revisions, and the economy trending toward a deceleration in growth for the rest of 2015, expect gas prices to remain low. According to the ITR Economic trends report the overall economy is expected to rebound  in January 2016 accelerating growth rate to 3.7% bringing natural gas prices along with it.

 

Bullish Indicators

– Hot weather expected across the majority of the lower 48 states.

– Increasing levels of natural gas demand and consumption.

 

Bearish Indicators

– Natural Gas Storage

– Above average production levels compared to 2014

– Decelerating Economic Growth into 2016

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July 17th, 2015

Executive Market Summary

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After a bearish two weeks prices are expected to rebound is response to above average temperatures and a projected increase in demand.

Short Term driver-Bullish market

  • Above average temperatures
  • Natural Gas demand expected increase

Long Term Drivers

  • Pipeline Construction
  • EPA Regulation
  • LNG Export Projects
  • Natural Gas Exports to Mexico
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July 13th, 2015

Executive Market Summary

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Short Term driver-Bearish market

  • Above average storage injections
  • Record high production rate
  • Cooler weather drove demand down

Long Term Drivers

The Supreme Court ruled against the EPA on their MATS (Mercury Air Toxic Standard) regulation because they failed to weigh the cost to benefit implications. The case has been pushed back to the lower courts for the EPA to perform a cost analysis.

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June 29th, 2015

Executive Summary

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Cooler than normal weather is expected in the Northeast and Midwest through July 5. This is a welcome change compared to last week where population weighted cooling degree days were 24% above normal. Last week’s warm weather hindered the latest storage injection which came in at 75 Bcf. This is down from 89 Bcf the week prior and less than last year’s 110 Bcf injection. It also came in below estimates of 76-80 Bcf.

Natural gas demand is up 17% this year to date compared to last year. A large part of this increase in demand has been led by power generation. Consumption of natural gas for power generation increased by 6.1% last week – 24.2% higher than the same week last year.

Long Term

US natural gas exports to Mexico reached a record high of 3.5 Bcf on June 18 (Bentek) bringing exports 33% higher year to date over 2014’s levels. Exports from the US to Mexico are expected to continue expanding with several pipeline projects in the works. Mexico’s increase in demand for natural gas is due to their commitment to reduce their dependency on fuel oil for electricity generation.

Exports to Mexico

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June 26th, 2015

RPM Brings on a New Associate Energy Manager

Brett_1_SmallerRapid Power Management (RPM) is excited to announce the appointment of Brett Thompson as our new Associate Energy Manager.  Brett joins RPM with an extensive economics background and understanding of the business cycle.

Brett is currently tasked with assisting the needs of our pricing coordinator. He’ll be responsible for matching our sales team’s needs with the knowledge and insight that has propelled Rapid Power Management to the front ranking of energy consulting companies in Texas.

With a dedication to expanding knowledge, Brett will use an educative approach to maximize the effectiveness of his position before moving on to sales. He holds a BA degree in economics from Texas State University.

Please find Brett’s contact information below. You may begin copying Brett on pricing and contracts as he works to assist the pricing coordinator. If you have any questions or concerns about this request, please let us know.

Brett Thompson | BThompson@rapidpower.net 

rpm | rapid power management

t 469-759-1461 | f 972-820-0111

linkedin | twitter | google+ | youtube

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