THE Leap Day One Minute Energy Update
THE One Minute Energy Update for LEAP DAY!!
#HappyLeapDay!
***#NYMEXMovingDownSlowly #PG&EBasisDown #SoCalGasBasisDown #WeatherGood #CarbonOffsetsCheap!! ***
***NYMEX ****– NYMEX is cheap and should be purchased before the summer heat comes into focus. *
***NYMEX pricing so far today - ****Open = $1.86, High = $1.91, Low = $1.82, Current = $1.86. NYMEX prices are up approximately $0.05 from 1 week ago and down approximately $1.00 from 1 year ago. *
NYMEX CALENDAR YEAR ESTIMATES* – 2024 = $2.57, 2025 = $3.46, 2026 = $3.79.*
2023 NYMEX Monthly average = $2.73. 2022 NYMEX Monthly average = $6.64. 2021 NYMEX Monthly average = $3.84. We remain well below the last 3-year averages at a 40+ month low.
*We are below the 50-day ($2.29), and above the 20-day ($1.77) and the 9-day ($1.69) average. *
RESISTANCE* – Starting @ 1.93/$1.98. *
THE PIVOT* @ $1.85. We’re right there…..*
SUPPORT* - Starting @ $1.80/$1.73. *
BASIS* – Both PG&E and SoCal Basis prices are down AGAIN today for day ahead pricing. Forward months are also down. No change from yesterday’s opinion - once we get into March, we could see further downward pressure, but it won’t last forever. Summer heat will be the focus before we know it. *
*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 ****– The United States remained the largest LNG supplier to Europe in 2023, followed by Qatar, then Russia, then Algeria, then Nigeria. *
PRODUCTION/SUPPLY & DEMAND* –**** ****Today’s Est. Supply = 108.4Bcf/D. Supply 7 Day Avg. = 108.38Bcf. Today’s Estimated Production = 103.1Bcf/D. *
*Latest Demand 7 Day Avg. from 2-29-24 = 112.8Bcf/D. Today’s expected demand = 124.5Bcf. That’s up 20.6Bcf from 2-26-24. Should be short lived. No need to panic. *
***RIG COUNT ****– The next rig count comes out 3-1-24. *
WEATHER* – NG Weather has this to say for 2-29-24 – 3-6-24, “Weather systems will impact the West w/rain, snow, and mild to cool highs of 30s to 50s. A frosty weather system will exit the East today but only after a chilly start w/low of -0s to 20s for decently strong national demand. However, much of the US will warm back above normal Fri-Wed w/highs of 50s-80s for very light national demand besides the cool and stormy West where heavy rain and snow is expected. Overall, moderate demand today, then back to light/very light.” 6 – 10-day forecast = bearish. 10-15-day forecast = bearish. 3-month forecast = bearish. Summer forecast = bullish. *
STORAGE* – Today’s storage report was forecasted to show a withdrawal of 89Bcf. The actual report shows a withdrawal of 96Bcf. We are now 248Bcf above this time last year. We are 498Bcf above the 5-year average of 1,876Bcf. At 2,374Bcf, we remain above the 5-year average. Estimated storage at the start of Injection season (4-1-24) is 2,100Bcf. Estimated storage at the end of 2024 injection season (10-31-24) is 4,150Bcf. Bearish projections.*
***CRUDE – ****U.S. refinery activity continues to increase. Current price = $78.65. Forward estimates: 2024 = $75.93, 2025 = $70.86, 2026 = $67.46. *
CA RETAIL POWER* – CAISO stays just above $34MWH. *
***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 are entering the first shoulder season of 2024.******The current and short-term market is very bearish. Everything is going our way. How long does it last? In my opinion, it won’t last through the summer. Increased exports to Mexico and LNG exports, summer heat, increased cooling demand pulling more natural gas, and the threat of production shut ins are all bullish factors. When they hit, expect the market to rebound upward quickly. *
**Indicative Fixed Prices out of April ’24 **
PG&E CG SOCAL CG SoCal Border (+ $0.51 BTS)
1 MONTH $3.28 $3.65 $3.16
3 MONTHS $3.28 $3.86 $3.41
6 MONTHS $3.69 $4.68 $4.34
Winter Strip (Nov ’24 – Feb ’25)
$6.44 $7.44 $6.98
12 MONTHS $4.74 $5.59 $5.24
24 MONTHS $5.04 $5.84 $5.44
Summer Strip (April ’24 – Aug ‘24)
$3.56 $4.54 $4.09