Here Comes That Summer Volatility.
THE One Minute Energy Update for 5-30-24
#NYMEXDown #PG&EBasisUp #SoCalBasisUp #WeatherTurningBullish #CarbonOffsets
NYMEX Pricing So Far Today - Open = $2.66, High = $2.68, Low = $2.56, Current = $2.59. NYMEX prices are flat from 1 week ago and down approximately $0.30 from 1 year ago.
NYMEX CALENDAR YEAR ESTIMATES – 2024 = $2.85, 2025 = $3.48, 2026 = $3.86.
2024 NYMEX Monthly Average (so far this year) = $1.98. 2023 NYMEX Monthly average = $2.73. 2022 NYMEX Monthly average = $6.64. 2021 NYMEX Monthly average = $3.84.
We are above the 50-day ($2.03), the 20-day ($2.43) and below the 9-day ($2.64) average.
RESISTANCE – Starting @ $2.61/$2.76.
THE PIVOT @ $2.51.
SUPPORT - Starting @ $2.36/$2.26.
BASIS – Both PG&E CG Basis SoCal Basis prices are up slightly today. Still cheaper than they have been in quite some time.
The 2023 PG&E CG First of the Month Index averaged $9.83. 2024 averaging $3.51 through May ’24.
The 2023 SoCal CG First of the Month Index averaged $10.95. 2024 averaging $3.29 through May ’24.
The 2023 SoCal Border First of the Month Index averaged $8.14. 2024 averaging $2.65 through May ’24.
LNG EXPORTS, NG EXPORTS, NG IMPORTS – LNG exports are averaging 12.8Bcf/D, up from April ’24’s average of 11.9Bcf/D. We are still well below the record setting Dec ’23 that averaged 14.7Bcf/D.
LNG Exports Average = 12.9Bcf/D. Mexico Exports = 6.7Bcf. Canadian Imports = 5.7Bcf.
PRODUCTION/SUPPLY & DEMAND THIS WEEK – Some of the “experts” believe production could increase back over 100Bcf/D as summer cooling demand picks up. May averaged 97.7Bcf/D production, down from April ‘24’s 98.2Bcf/D. Overall production is down 8% in 2024 from 2023 due to delayed well completions and reduced drilling activities.
Today’s Est. Supply = 106.6Bcf. Supply 7 Day Avg. = 106.79Bcf. Today’s Est. Production = 99.5Bcf.
Today’s Est. Demand = 96.5Bcf. Latest Demand 7 Day Avg. = 95.0Bcf. Low demand over the next few days before moving to strong demand next week.
RIG COUNT – Last week’s rig count (5-24-24) has the following – the oil rig count is unchanged with a total of 497 active rigs. The natural gas rig count falls by 4 for a total of 103 active rigs. The miscellaneous rig count is unchanged at 4 active rigs. Overall rig count = 600. We are down 111 active rigs compared to this time last year.
STORAGE – The estimate for this week’s storage report was a 78Bcf injection. The actual is an injection of 84Bcf. We are currently 380Bcf above this time last year and 586Bcf above the 5-year average of 2,209Bcf. At 2,795Bcf, we are above the 5-year historical range. Storage is projected to be 3.85Tcf by Oct ’24 and 1.60Tcf for March ’25.
WEATHER – Major storms from Texas to the Great Lakes. NatGasWeather has this to say, “The far southern US and California will be very warm to hot w/highs of mid-80s-and 90s besides hotter 100s SW deserts. Most of the northern 2/3 of the US will be mild through the weekend w/highs of 60s-to lower 80s. The MW and NE will warm into the 80s next week, while it will remain very warm to hot over the southern US w/highs of upper 80s and 90s.”
5 – 10-day forecast = bullish. 10-15-day forecast = bearish. 3-month forecast = bullish. Summer (July – Sep) forecast = bullish.
CRUDE – Down. Current price = $79.24. Forward estimates: 2024 = $78.03, 2025 = $74.02, 2026 = $70.20.
CA RETAIL POWER – CAISO pricing moves up to just over $15 per MWH.
CARBON OFFSETS – California and other states will be mandating companies buy carbon offsets, starting as early as 2025. Is your company ready for that mandate? Better to get ahead of the 2025 demand – more options, greater price range. We can help.
THE BOTTOM LINE – NYMEX is seeing increased volatility in pricing, both up and down, as much as $0.25 on any given day. Despite higher demand and increased LNG exports, significant oversupply, and production, downward pressure on pricing remains.
Indicative Fixed Prices out of June ’24
PG&E CG SOCAL CG SoCal Border (+ $0.51 BTS)
1 MONTH $2.45 $2.30 $1.98
3 MONTHS $3.30 $3.80 $3.40
6 MONTHS $3.75 $4.25 $3.90
12 MONTHS $4.69 $5.18 $4.77
24 MONTHS $5.05 $5.74 $5.34
Summer Strip (April ’24 – Aug ‘24)
$3.50 $4.05 $3.66
Winter Strip (Nov ’24 – Feb ’25)
$5.61 $6.12 $5.72