Bulls Could Show Up Next Week
THE One Minute Energy Update for 3-15-24
#BullsCouldShowUpNextWeek
***#NYMEXDown #PG&EBasisDown #SoCalGasBasisDown #WeatherSplit #YouWillNeedCarbonOffsetsBeforeYouKnowIt ***
***NYMEX pricing so far today - ****Open = $1.75, High = $1.77, Low = $1.66, Current = $1.66 – down $0.24 from yesterday’s high. NYMEX prices are down approximately $0.20 from 1 week ago and down approximately $0.95 from 1 year ago. *
NYMEX CALENDAR YEAR ESTIMATES* – 2024 = $2.41, 2025 = $3.43, 2026 = $3.78.*
*2023 NYMEX Monthly average = $2.73. 2022 NYMEX Monthly average = $6.64. 2021 NYMEX Monthly average = $3.84. *
*We are below the 50-day ($2.12), the 20-day ($1.75) and the 9-day ($1.79) average. *
RESISTANCE* – Starting @ $1.79/$1.84. *
THE PIVOT* @ $1.71. Currently below the pivot. *
SUPPORT* - Starting @ $1.66/$1.59. *
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 ****– Freeport close to restarting. *
PRODUCTION/SUPPLY & DEMAND* – Today’s Est. Supply = 106.1Bcf/D. Supply 7 Day Avg. = 106.1Bcf. Today’s Estimated Production = 99.3Bcf/D. Yesterday’s demand = 100.0Bcf. Latest Demand 7 Day Avg. = 106.8Bcf/D. Demand is expected to be very low through the weekend before turning to moderate by Monday. *
***RIG COUNT ****– Today’s oil & gas rig count is the strongest since Sep ’23. Oil added 6 rigs for a total of 510 active rigs. Gas added 1 rig for a total of 116 active rigs. Despite lower rig counts than the past few years, both oil and gas output is on track to set records in 2024 and 2025 due to improved efficiency. *
WEATHER* – NatGasWeather.com has this to say for the next 6 days, “Most of the interior US will be mild into Saturday w/highs of 50s-80s. A chilly weather system will track across the central, southern, and eastern US late 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.”. 5 – 10-day forecast = bullish with west heat and east cold. 10-15-day forecast = bearish. 3-month forecast = bearish. Summer forecast = bullish. *
STORAGE* – We are 336Bcf above this time last year and 629Bcf above the 5-year average of 1,696Bcf. At 2,325Bcf, we are above the 5-year historical range.*
***CRUDE – ****Current price = $81.00. Forward estimates: 2024 = $78.79, 2025 = $73.07, 2026 = $69.07. *****
CA RETAIL POWER* – CAISO just over $27 per MWH. And in case you didn’t hear - here in the Gold-Plated State of California, our utility companies will be pushing for a new law in 2024 that will determine your electricity rate at home based on your income. The more you make, the more you pay! *
RENEWABLE ENERGY* –*
***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 could see some bulls by the end of next week. Demand should increase while supply may fall. If we get below normal temperatures followed by above normal temperatures, for a prolonged time, the bulls will hang around. It won’t take much support for prices to rally from the current basement. *
**Indicative Fixed Prices out of April ’24 **
PG&E CG SOCAL CG SoCal Border (+ $0.51 BTS)
1 MONTH $2.87 $2.74 $2.46
3 MONTHS $2.90 $2.92 $2.58
6 MONTHS $3.39 $3.94 $3.59
12 MONTHS $4.50 $5.16 $4.81
24 MONTHS $4.90 $5.54 $5.13
Summer Strip (April ’24 – Aug ‘24)
$3.25 $3.75 $3.38
Winter Strip (Nov ’24 – Feb ’25)
$6.28 $7.27 $6.92