Bulging Inventories Pushing Prices Down
THE One Minute Energy Update for 3-13-24
#MajorSupplierCallingItQuitsInC&ISector
#BulgingInventoriesPushingPricesDown
***#NYMEXFallingFurther #PG&EBasisDown #SoCalGasBasisDown #WeatherBearish #YouWillNeedCarbonOffsets ***
***NYMEX pricing so far today - ****Open = $1.71, High = $1.71, Low = $1.65, Current = $1.66. NYMEX prices are down approximately $0.25 from 1 week ago and down approximately $0.75 from 1 year ago. *
NYMEX CALENDAR YEAR ESTIMATES* – 2024 = $2.43, 2025 = $3.42, 2026 = $3.77.*
*2023 NYMEX Monthly average = $2.73. 2022 NYMEX Monthly average = $6.64. 2021 NYMEX Monthly average = $3.84. *
*We are below the 50-day ($2.16), the 20-day ($1.74) and the 9-day ($1.82) average. *
RESISTANCE* – Starting @ $1.79/$1.84. *
THE PIVOT* @ $1.74.*
SUPPORT* - Starting @ $1.66/$1.61. *
BASIS* – Both PG&E and SoCal Basis prices continue to fall. *We are in the buying range.
*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. We remain WELL BELOW the last 3-year averages. *
***LNG EXPORTS, NG EXPORTS, NG IMPORTS ****– As of 3-12-24 - Exports averaging 13.4Bcf/D. Exported gas to Mexico averaging 6.3Bcf. Imports from Canada averaging 3.9Bcf/D. *
PRODUCTION/SUPPLY & DEMAND* – Today’s Est. Supply = 106.5Bcf/D. Supply 7 Day Avg. = 106.94Bcf. Today’s Estimated Production = 100.5Bcf/D. Yesterday’s demand = 101.0Bcf. Latest Demand 7 Day Avg. = 108.17Bcf/D. Demand is expected to be very low. *
***RIG COUNT ****– The oil & gas rig count fell by 7 last week. Oil fell by 2 for a total of 504 rigs. Natural gas rigs fell by 4 rigs for a total of 115 active rigs. Miscellaneous rigs fell by 1. We’re down approximately 124 rigs from this time last year. *
WEATHER* – NatGasWeather.com has this to say for the next 6 days, “Most of the interior US will be mild to nice the next few days w/highs of 50s-80s. A chilly weather system will track across the central, southern, and eastern US this weekend into next week w/rain, snow, and highs of 20s-40s for stronger demand, while the West warms into the 50s-80s as high pressure strengthens. Overall, Very Low demand through Saturday, then Moderate Sun-Mon.”. 5 – 10-day forecast = bearish. 10-15-day forecast = bearish. 3-month forecast = bearish. Summer forecast = bullish. *
STORAGE* – The latest forecasts for Thursday’s storage report are anywhere from 14Bcf withdrawal to a 20Bcf injection. *
***CRUDE – ****OPEC said world crude demand will increase by 2.25 million b/d in 2024 and by 1.85 million b/d next year, keeping its bullish forecasts unchanged from last month and raising its GDP forecasts. Current price = $79.19. Forward estimates: 2024 = $75.77, 2025 = $71.08, 2026 = $67.72. *****
CA RETAIL POWER* – CAISO falls under $26. *
RENEWABLE ENERGY* – While the western world spends countless time and money on complying with climate policies, damn the costs, the two most populated countries, China, and India, are building more coal plants to guarantee they keep up with production demand from the western world for blades and panels. Even though China and India invest heavily in RE, neither country is confident that 24/7 energy sourcing can be met from these two sources. And for good reason. *
***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 – ***NYMEX could fall further once we get out of Withdrawal Season. PG&E and SoCal Basis are both falling. If you want to hold out for lower NYMEX and Basis, that’s your prerogative. When support comes, we can expect a fast and strong upward correction. When it comes. Until then, we are enjoying great pricing and should take advantage of it all.
**Indicative Fixed Prices out of April ’24 **
PG&E CG SOCAL CG SoCal Border (+ $0.51 BTS)
1 MONTH $2.88 $2.75 $2.47
3 MONTHS $2.92 $2.94 $2.61
6 MONTHS $3.41 $3.96 $3.61
12 MONTHS $4.53 $5.17 $4.82
24 MONTHS $4.92 $5.56 $5.15
Summer Strip (April ’24 – Aug ‘24)
$3.30 $3.80 $3.44
Winter Strip (Nov ’24 – Feb ’25)
$6.31 $7.30 $6.95