Warmer Than Normal Temperatures Keep Natural Gas Prices Down

THE One Minute Energy Update for 3-12-24

#NYMEXFalling #PG&EBasisDown #SoCalGasBasisDown #WeatherBearish #YouWillNeedCarbonOffsets

NYMEX pricing so far today - Open = $1.75, High = $1.82, Low = $1.71, Current = $1.72. NYMEX prices are down approximately $0.20 from 1 week ago and down approximately $0.70 from 1 year ago.

NYMEX CALENDAR YEAR ESTIMATES – 2024 = $2.45, 2025 = $3.43, 2026 = $3.77.

2023 NYMEX Monthly average = $2.73. 2022 NYMEX Monthly average = $6.64. 2021 NYMEX Monthly average = $3.84.

We are below the 50-day ($2.18), and above the 20-day ($1.74) and the 9-day ($1.85) average.

RESISTANCE – Starting @ $1.81/$1.87.

THE PIVOT @ $1.78.

SUPPORT - Starting @ $1.77/$1.68.

BASIS – Both PG&E and SoCal Basis prices continue their downward trend. 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 – Exports averaging 13.4Bcf/D. Exported gas to Mexico averaging 6.3Bcf. Imports from Canada averaging 3.9Bcf/D.

PRODUCTION/SUPPLY & DEMAND – As of 3-11-24 - Today’s Est. Supply = 106.94Bcf/D. Supply 7 Day Avg. = 107.8Bcf. Today’s Estimated Production = 100.5Bcf/D. Twice in the past week Supply outweighed Demand. THAT is bearish. Latest Demand 7 Day Avg. = 108.17Bcf/D. Demand is expected to be low.

RIG COUNT – The oil & gas rig count fell by 7 last week. Oil fell by 2 for a total of 504 rigs. Natural gas rigs fell by 4 rigs for a total of 115 active rigs. Miscellaneous rigs fell by 1. We’re down approximately 124 rigs from this time last year.

WEATHER – NatGasWeather.com has this to say, “March 12-18: Most of the interior US will be mild to nice the next several days w/highs of 50s-80s. A chilly weather system will track into the central 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. Overall, Very Low demand through Saturday, then Moderate Sun-Mon.”. 5 – 10-day forecast = bearish. 10-15-day forecast = bearish. 3-month forecast = bearish. Summer forecast = bullish.

STORAGE – We should finish out withdrawal season with 2.3Tcf. Bearish storage going into Injection Season. As of last week, we are 280Bcf above this time last year. We are 551Bc f above the 5-year average of 1,783Bcf. At 2,334Bcf, we remain above the 5-year historical range.

CRUDE – Current price = $78.47. Forward estimates: 2024 = $76.01, 2025 = $71.26, 2026 = $67.85.

CA RETAIL POWER – CAISO stays just above $33MWH.

RENEWABLE ENERGY – Renewable Energy Magazine recently stated that more and more consumers are losing confidence in renewable energy doing what it once promised to do, along with 70% of consumers polled saying they feel they can do no more individually to lessen their carbon footprint.

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 – I’m not sure how much lower NYMEX can fall. We’re looking at a 42.00 difference in price from April ’24 to Dec ’24. If you’re holding out for Winter strips to go off at $1.75 or even $2.25, don’t. PG&E CG Basis fell 40.25+ in the past week. SoCal Basis doubles PG&E CG’s week long fall. Prices are good and could get a little better, but don’t forget… we are in a shoulder season and our best buying opportunities, historically, take lace during shoulder seasons. If you want to lock up the summer only and roll the dice on summer weather, we can do that. Or we can lock up the next 12 – 24 months, beating the last 3 years’ worth of average prices.

Indicative Fixed Prices out of April ’24

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

1 MONTH $2.90 $2.88 $2.59

3 MONTHS $2.98 $3.06 $2.73

6 MONTHS $3.51 $4.12 $3.76

12 MONTHS $4.62 $5.25 $4.92

24 MONTHS $4.99 $5.63 $5.27

Summer Strip (April ’24 – Aug ‘24)

$3.40 $3.97 $3.53

Winter Strip (Nov ’24 – Feb ’25)

$6.36 $7.26 $6.86