NYMEX NatGas Strengthening

THE One Minute Energy Update for 8-7-24

Today’s highlights -   

. Monday saw a 3 ½ month low for NYMEX NG prices.  Yesterday finished up $0.06.  NG prices start today up as much as $0.10. 

. Dow Jones continues its climb back up after the 3-day global panic/selloffs. 

. Bakersfield shakes with a 5.2 Earthquake.  Multiple aftershocks are still being felt far and wide.

. Solar sourced power generation in CA jumped to over 18,000MW over the past few days.  Impressive.  Now do it every day and solar might be taken seriously as a “reliable energy source”. 

. California, you’re going to need 18,000MW/D of solar and a whole lot more to keep up with the growing power demand and outdated CAISO grid.

. Debby expected to move inland.  In the meantime, Debby is wreaking havoc on road and air travel.

#NYMEX Open = $2.02, High = $2.11, Low = $2.01, Current = $2.09.  Relatively flat from 1 week ago. Down as much as $0.70 from 1 year ago.

NYMEX CALENDAR YEAR ESTIMATES – 2024 = $2.44, 2025 = $3.16, 2026 = $3.50.

2024 NYMEX Monthly Average (through Aug ‘24) = $2.11.  2023 NYMEX Monthly average = $2.73.  2022 NYMEX Monthly average = $6.64.  2021 NYMEX Monthly average = $3.84. 

We are below the 50-day ($2.45), the 20-day ($2.10) and the 9-day ($1.99) average.  

RESISTANCE – Starting @ $2.06/$2.11. 

THE PIVOT @ $1.98. 

SUPPORT - Starting @ $1.92/$1.84.

BASIS – Both #PG&ECGBasis and #SoCalCGBasis prices remain elevated.  Cooler weather showing up by week’s end.  Basis prices should fall.      

The 2023 PG&E CG First of the Month Index averaged $9.83. 2024 averaging $3.34 through Aug ’24. 

The 2023 SoCal CG First of the Month Index averaged $10.95.  2024 averaging $3.05 through Aug ’24. 

The 2023 SoCal Border First of the Month Index averaged $8.14.  2024 averaging $2.51 through Aug ’24. 

#LNG EXPORTS, #NatGasEXPORTS, #NatGasIMPORTS – LNG Exports = 12.9Bcf.  Mexico Exports = 6.8Bcf.  Canadian Imports = 6.3Bcf.

#PRODUCTION, #SUPPLY, #DEMAND THIS WEEK –

Today’s Est. Supply = 109.1Bcf.  Supply 7 Day Avg. = 109.9Bcf. 

Today’s Est. Production = 102.5Bcf. 

Today’s Est. Demand = 106.7Bcf.  Latest Demand 7 Day Avg. = 107.52Bcf.  National demand will be Moderate-High the next 7-days.

#RIGCOUNT – The latest rig count (8-2-24) = 586 active rigs.   Oil remains the same at 482 rigs, natgas falls by 3 to 98 rigs, miscellaneous remains at 6 rigs. Compare that to 659 active rigs this time last year. 

#STORAGE – We are currently 252Bcf higher than this time last year and 441Bcf above the 5-year average of 2,808Bcf.  At 3,249Bcf, we are above the 5-year historical range.  The latest Storage projections for Oct ’24 range between 3.87Tcf – 4.03Tcf.  The March ’25 estimate is 1.63Tcf – 1.95Tcf. 

Hurricane Season Update – Hurricane Debby is back to being TS Debby.  Historical rainfall expected in Georgia and the Carolinas.    

#CRUDE – Up.  Current Cash price = $74.62.  Forward estimates: 2024 = $72.10, 2025 = $69.20, 2026 = $66.58. 

#CAISO and #CALIFORNIARETAILPOWER – Grid Status = R.M.O. continues.  CAISO current pricing = $37 - $42. 

The latest % for #CaliforniaPowerGeneration = NatGas @ 28.2%, RE @ 57.7$ 17.5% (Solar makes up 88.9% of that), Hydro @ 4.7%, Imports @ 2.7%, Nuclear @ 6.7%.  Impressive generation, solar. 

#WEATHER – NatGasWeather.com’s 6-day forecast, “The Midwest, Plains, Ohio Valley, and Northeast will cool into the upper 60s to lower 80s through the weekend as weather systems track through with showers and thunderstorms, including widespread rains from remnants of tropical cyclone Debby spreading northward up the East Coast. Much of the western and southern US will remain very warm to hot w/highs of upper 80s to 100s, hottest California to Texas.”

Today = Bearish. 5 – 10-day forecast = Bearish.  10-15-day forecast = Bearish.  Aug – Oct forecast = Bearish.  Oct – Dec forecast = Bearish. Winter Forecast (Dec ’24 – Feb ’25) = Bearish.    

#CARBONOFFSETS – 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 – NatGas “experts” believe NatGas prices will remain weak due to a looming recession.  Currently, the probability of a 2025 recession is 51%.  Even money.  I believe we will have a clearer direction, bullish or bearish, after the first week of Nov ’24.  So, if the current price offers are within your strike price range, lock it up.  If you want to gamble, go to a casino.

RFP ES is now providing energy in WA, OR, CA, NV, AR, NM, (parts of) TX, PJM region, Mid-Con region, Gulf States region, NC, and VA.  So, going forward, rather than having a massive indicative daily pricing sheet (that changes by the minute), we will simply quote any requests you may have on an individual basis.  We will still report on NYMEX and Western Region Basis movement.       

ALSO – If you would like an indicative/executable quote, you can simply go to RFPES.com and submit a Request for Proposal (RFP).  THE RFP will be sent to all our supply partners who are supplying energy in that region.  You choose the time and date you would like to receive the quote – please give 48 hours from the time you submit to the time you want to receive the quote.  It takes less than 5 minutes to submit a request for proposal.