Executive Market Summary

August 21st, 2015

Executive Market Summary

Click Here to Download

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
Read More



August 14th, 2015

Executive Market Summary

Click to Download

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
Read More



August 7th, 2015

Executive Market Summary

Click here to download

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
Read More



July 31st, 2015

Executive Market Summary

Click here to Download

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
Read More



July 24th, 2015

Executive Market Summary

Click Here to Download

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

Read More



July 17th, 2015

Executive Market Summary

Click Here to Download

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
Read More



July 13th, 2015

Executive Market Summary

Click Here to Download

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.

Read More



June 29th, 2015

Executive Summary

click here to download

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

Read More



June 22nd, 2015

Executive Market Summary

CLICK HERE TO DOWNLOAD!

Natural gas storage remains healthily above last year’s level and just 46 Bcf above the five year average. Last week’s 89 Bcf injection was below estimates of 91-95 Bcf and less than last year’s 112 Bcf injection for the same week. The market remains subdued but analysts believe that smaller injections, like last week’s, can be expected moving forward.

Eastern US power burn is increasing due to both temperatures and long term structural changes. According to NOAA, the Northeast recorded its warmest May ever and 12.1 GW of coal plants will retire by the end of this month. See chart below:

Nat Gas Consumption

Above normal temperatures are likely to continue through the week across the southeast and west. The Midwest and Texas will see mostly normal temperatures before cooling off a bit this weekend.

Read More



June 15th, 2015

Executive Market Summary

CLICK HERE TO DOWNLOAD!

Natural gas prices are beginning to rise thanks to hotter weather. Summer temperatures put pressure on the market by increasing demand on electric power needs. The temperature outlook remains bullish as extreme warmth is expected for densely populated areas in the Northeast, Mid-Atlantic and Pacific Northwest. Additionally, El Nino conditions are certain to last through summer. The results will be hot temperatures in the Eastern and Central US, especially later in the season.

Supply and production remained nearly flat from last week which could pose an issue as electricity demand continues increasing. Analysts expect that the demand on natural gas increase from last year due to a combination of summer temperatures and the coal retirements due to EPA regulation.

While the 111 Bcf storage report was on the low end of expectations, it remains above both last year’s storage level and the five year average storage level. From April 3, 2015 (the start of injection season) to June 5, 2015, injections totaled 883 Bcf – 16% more than the 758 Bcf injected during the same period last year.

Read More