Natural Gas Storage
Almost Back to the 5-Year Average Storage Level
The most recent EIA Storage Report showed an injection of 76 BCF, slightly above market projections. This injection placed us within 67 BCF or 3.6% of the 5-year average. The West Region is positioned well with a stock level of 24% above the 5-year average. After the news of the storage injection, June 2015 NYMEX contracts dropped $0.03/MMBTU to $2.75/MMBTU and the 12-month strip contract traded at $3.00. All three Regionals experienced injections this past week. The Producing Region led the way with 38 BCF followed by the East with 31 BCF and the West with 7 BCF. Currently, the West Region storage levels lead the way with 24% above the 5-year average.
Weather Forecast: Cooler in South Central States and on the Northern Coastline
The remainder of May looks to deliver cooler temperatures in the South Central states from Alabama to New Mexico and from Texas to Nebraska. Expect above average temps in the Northeast and Northwest quadrants of the U.S. Thelong-range forecast (May through July) is expected to deliver cooler than normal temperatures in Texas and the Central Plains, with warmer temps along the entire Atlantic Coast as well as the Pacific Northwest.
Natural Gas Prices Trended Upward
Natural Gas prices have started to trend upward with the June 2015 contract price reaching $2.79 (May 2015 was $2.517/MMBTU). The cooler weather caused a slight slow-down in gas injections, which may have given support to the higher gas demand last week. Overall gas consumption grew 6.7% last week. The usage increase was attributed to higher commercial and residential demands (18.4% increase) mainly driven by the late season heating demands. The demand for natural gas generation was only up 0.4% last week, but 16% higher than the same period a year ago.
Electricity Prices Slightly Up
This past week, PJM Electricity prices moved upward about 1%; partly due to warmer temperatures and strong spot gas prices. While electric prices did rise, they are still near historic lows.
Energy Prices Starting to Bounce Around
Natural gas storage is inching back towards the 5-year historic average levels. However, the recent cold weather caused an unexpected drain on natural gas supply and resulted in a slight bump up in prices. Other than the minor temperature blip, energy prices still remain near historic lows.
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