Wall Street Bets on NYMEX Bulls to Return

THE One Minute Energy Update for 5-1-24

***#NYMEXFalls #PG&EBasisUp #SoCalBasisDown #WeatherBullish #CarbonOffsetsSoldHere ***

***NYMEX Pricing So Far Today - ****Open = $1.95, High = $1.97, Low = $1.91, Current = $1.92. NYMEX prices are down approximately $0.15 from 1 week ago and down approximately $0.60 from 1 year ago. *

NYMEX CALENDAR YEAR ESTIMATES* – 2024 = $2.61, 2025 = $3.52, 2026 = $4.00.*

*2023 NYMEX Monthly average = $2.743. 2022 NYMEX Monthly average = $6.64. 2021 NYMEX Monthly average = $3.84. *

*We are above the 50-day ($1.76), the 20-day ($1.79) and the 9-day ($1.80) average. *

RESISTANCE* – Starting @ $2.04/$2.09.*

THE PIVOT* @ $2.00.*

SUPPORT* - Starting @ $1.95/$1.92. *

BASIS* – PG&E CG Basis jumps while SoCal CG Basis falls. *

*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. *

***LNG EXPORTS, NG EXPORTS, NG IMPORTS ****– 4 straight months of LNG export declines. Good for domestic supply. Bad for the US. LNG Exports = 11.0Bcf. Mexico Exports = 6.5Bcf. Canadian Imports = 4.9Bcf. *

PRODUCTION/SUPPLY & DEMAND* – Today’s Est. Supply = 101.9Bcf. Supply 7 Day Avg. = 103.5Bcf. Today’s Est. Production = 96.1Bcf. Today’s Est. Demand = 96.4Bcf. Latest Demand 7 Day Avg. = 94.69Bcf. Overall demand is low for the balance of the week. *

***RIG COUNT ****– The oil rig count is down by 5 for a total of 506 active rigs. The natural gas rig count fell by 1 to 105 active rigs. *

STORAGE* – The latest projection for tomorrow’s storage report is an injection of 54Bcf. Compare that to last year’s injection of 62Bcf, and the 5-year average of 72Bcf. We are currently 439Bcf above this time last year and 655Bcf above the 5-year average of 1,770Bcf. At 2,425Bcf, we are above the 5-year historical range. *

WEATHER* – 60’s – 80’s for most of the US. SW/Texas/SE will see temps in the 90’s. Pac NW and Rockies will enjoy temps in the 50’s. 5 – 10-day forecast = shifting. 10-15-day forecast = bearish. 3-month forecast = bullish. Summer (June – Aug) forecast = bullish. *

CRUDE –* Falling. Current price = $81.89. Forward estimates: 2024 = $79.92, 2025 = $74.77, 2026 = $70.57. *****

CA RETAIL POWER* – CAISO pricing moves up to just over $18 per MWH. *

***RENEWABLE ENERGY – ***From EIA, US electricity generation from wind turbines decreased for the first time since the mid-1990s in 2023 despite the addition of 6.2 gigawatts (GW) of new wind capacity last year. Data from our Power Plant Operations Report show that U.S. wind generation in 2023 totaled 425,235GWh, 2.1% less than the 434,297 GWh generated in 2022. U.S. wind capacity increased steadily over the last several years, more than tripling from 47.0 GW in 2010 to 147.5 GW at the end of 2023. Electricity generation from wind turbines also grew steadily, at a similar rate to capacity, until 2023. Last year, the average utilization rate, or capacity factor, of the wind turbine fleet fell to an eight-year low of 33.5% (compared with 35.9% in 2022, the all-time high). The 2023 decline in wind generation indicates that wind as a generation source is maturing after decades of rapid growth. Slower wind speeds than normal affected wind generation in 2023, especially during the first half of the year when wind generation dropped by 14% compared with the same period in 2022. Wind speeds increased later in 2023, and wind generation from August through December was 2.4% higher than during the same period in 2022. Wind speeds had been stronger than normal during 2022.” Unreliable renewable energy.

CARBON OFFSETS –* We have carbon offset offerings as low as $1 per unit to $375 per unit. You will find the perfect carbon offset to fit your carbon footprint recovery. *

***THE BOTTOM LINE ***– NYMEX prices are down nearly 40% from 1 year ago. That won’t last forever, in my opinion, and the reason for that is the coming increase in power demand. Electricity usage will skyrocket over the next few years (EV and AI driving it) and natural gas is the biggest, most reliable, and cost-effective power generation source. Opportunities are not forever. Take advantage of 40% off opportunities. And if you don’t believe me, here is a quote from a JP Morgan team member, "Although we still very much like gold as a structural multiyear bullish story with an updated price target of $2,600/oz, US Henry Hub natural gas has moved to the top of our list. We believe no other commodity can match its return potential this year," wrote Kaneva and a team of researchers. Louisiana's Henry Hub is considered the US benchmark since it's the largest trading point for natural gas in the country.”

***Indicative Fixed Prices out of June ’24 ***

PG&E CG SOCAL CG SoCal Border (+ $0.51 BTS)

1 MONTH $2.64 $2.61 $2.15

3 MONTHS $3.29 $3.99 $3.64

6 MONTHS $3.69 $4.39 $3.99

*12 MONTHS $4.69 $5.19 $4.69<br>

24 MONTHS $5.14 $5.74 $5.34*

Summer Strip (April ’24 – Aug ‘24)

$3.38 $4.14 $3.64

Winter Strip (Nov ’24 – Feb ’25)

$5.58 $6.09 $6.59