April Warming Up
THE One Minute Energy Update for 4-2-24
#AprilWarmingUp
***#NYMEXUp #PG&EBasisUp #SoCalGasBasisUp #WeatherWarming #CarbonOffsetsSoldHere ***
***NYMEX pricing so far today - ****Open = $1.83, High = $1.88, Low = $1.77, Current = $1.87. NYMEX prices are up approximately $0.25 from 1 week ago and down approximately $0.25 from 1 year ago. *
NYMEX CALENDAR YEAR ESTIMATES* – 2024 = $2.55, 2025 = $3.50, 2026 = $3.81.*
*2023 NYMEX Monthly average = $2.73. 2022 NYMEX Monthly average = $6.64. 2021 NYMEX Monthly average = $3.84. *
*We are below the 50-day ($1.87), but above the 20-day ($1.74) and above the 9-day ($1.70) average. *
RESISTANCE* – Starting @ $1.89/$1.94. *
THE PIVOT* @ $1.79. *
SUPPORT* - Starting @ $1.74/$1.65. *
BASIS* – Both PG&E and SoCal Basis prices are up today. This upward movement should be short lived as storage is strong in CA and demand should lessen. *
*The 2023 PG&E CG First of the Month Index averaged $9.83. The 2023 SoCal CG First of the Month Index averaged $10.95. The 2023 SoCal Border First of the Month Index averaged $8.14. *
***LNG EXPORTS, NG EXPORTS, NG IMPORTS ****– LNG exports averaging 12.9Bcf.D. Exports to Mexico = 6.2Bcf/D. *
PRODUCTION/SUPPLY & DEMAND* – Production seems to be down as much as 2.5Bcf /D compared to this time 2 weeks ago. Today’s Est. Supply = 106.9Bcf. Supply 7 Day Avg. = 106.6Bcf. Today’s Est. Production = 101.0Bcf. *
Today’s Est. Demand = 102.4Bcf. Latest Demand 7 Day Avg. = 104.91Bcf. 7-day Demand forecast remains moderate. Natural gas demand in 2024 may hit all-time highs.
***RIG COUNT ****– Last week’s oil rig count (3-28-24) fell by 3 to 506 active oil rigs. Gas rigs were unchanged at 112 active gas rigs. Miscellaneous rigs unchanged at 3 rigs. The total rig count is down 18% from this time 1 year ago. For March ’24, oil rose by 3 rigs while gas fell by 8 rigs. This is the biggest one month decline since Aug ’23. *
STORAGE* – We are 430Bcf above this time last year and 669Bcf above the 5-year average of 1,627Bcf. At 2,296Bcf, we are above the 5-year historical range. Stockpiles are 40% above average. *
WEATHER* – NatGasWeather.com has this to say for the next 6 days, “Comfortable temperatures will rule much of the US to open the week w/highs of upper 40s to 80s and despite areas of showers. A cooler trending weather system will track across the central US and into the East during the second half of the week into next weekend w/rain, snow, and highs of 30s to 50s, lows of 10s to 30s. Overall, light to moderate demand days 1-3, then strong days 4-7.”*
*5 – 10-day forecast = bearish. 10-15-day forecast = bullish. 3-month forecast = bullish. Summer (June – Aug) forecast = bullish. *
CRUDE –* Running up! Current price = $84.72. Forward estimates: 2024 = $80.72, 2025 = $743.49, 2026 = $70.18. *****
CA RETAIL POWER* – CAISO just over $33 per MWH. *
RENEWABLE ENERGY* – From High Country news, “The U.S. needs solar development to meet its renewable energy goals, which include a 100% carbon-pollution-free power grid by 2035. If the country succeeds in meeting this goal, the 11 Western states in the Lower 48 could have 548.6 GW of electricity generation capacity by 2045, according to data from one potential scenario published by the National Renewable Energy Lab. In this scenario, approximately one-third of capacity will come from solar energy, and more than three-quarters of that will come from utility-scale solar.” No cchnace of this happening due to an incapable grid, zero cost efficiency, and unreliability.*
***CARBON OFFSETS – ***We’re going to see a lot of carbon offsets coming out of Africa as their government finally gets serious about implementing “clean cooking” mandates/projects. If you’re looking to buy carbon offsets, our menu of carbon offsets continues to grow as we add more and more supply partners. Most companies will be mandated to curb their carbon footprint. SOME carbon offsets may be the easiest, cheapest, and most effective way to do so.
***THE BOTTOM LINE ***– We’re full on into Shoulder Season. The weather forecast over the next 2 – 4 weeks moves from bearish to bullish. If that forecast comes to fruition, we could see limited bears. Storage is still on our side and once we see where injections are coming in, we’ll have a better idea of just how advantageous this Shoulder Season will be for us.
**Indicative Fixed Prices out of May ’24 **
PG&E CG SOCAL CG SoCal Border (+ $0.51 BTS)
1 MONTH $2.73 $2.60 $2.35
3 MONTHS $3.05 $3.40 $3.05
6 MONTHS $3.50 $4.15 $3.88
12 MONTHS $4.70 $5.30 $4.99
24 MONTHS $5.10 $5.75 $5.35
Summer Strip (April ’24 – Aug ‘24)
$3.45 $4.10 $3.55
Winter Strip (Nov ’24 – Feb ’25)
$6.45 $7.15 $6.65