Gas It Up

June 30, 2016

The past 3 months

Natural gas prices have been on the rise

After establishing a new floor

With the Nymex dropping under $2.00 a dekatherm

It started an accent

And is now heading towards $3.00

That would be a 50% increase

What caused this sudden rise….

Some say…..

Supply / Demand

Others say greed

With the market choking on gas

And gas prices being low

They started shutting down wells

That can certainly drive prices up

Now throw the weather into the mix

Did we have a spring…

Maybe we will have a hot summer

The market is in flux

Should the long range forecast see a hot summer

Prices will continue to rise

If cooler temperatures prevail

You will start seeing prices back off

Should that be the case…

We will see a window of opportunity

For gas and electric prices will drop and

Become even more competitive

In the energy business

Timing is everything

We’ll keep you posted

Where’s the Floor

February 9, 2015

Natural gas is a commodity

That is traded on the nymex

When people say…

Natural gas is up 5 cents

Or

Natural gas is down 5 cents

They are talking about

The price of natural gas

Out of the ground

Which is traded

On the nymex…

If you flash back

5 to 6 years ago

You will probably remember

Natural gas prices were

Thru the roof

Trading around

$13 – $15 a dekatherm

Slowly

Over time

The market began to drop

It hit the floor

In May 2012

When the nymex

Hit $2 a decathem

(Nobody knows where the floor is

Until you pass it)

Since May 2012

We have been on a roller coaster

The nymex climbed up

To over $5.50

In Feb 2014

Then….

It began a slow descent

As of today

The nymex is

Trading at $2.59 a dekatherm

The point I am trying to make is….

The nymex is once again

Hovering

Just above the floor

It hit in May 2012

This is good news for

Those buying

Natural Gas and Electric

In the deregulated market

With the winter winding down

And with a glut of gas

In reserves

Prices are very competitive

This is a great time

To save

$$$$Money$$$$

Will gas go below the $2 a dekatherm

I wish I had a crystal ball

In a market

Where timing is everything…..

Now is a good time to be

Locking in future savings

As reported in Wall Street Journal

By
Tim Puko

A repeat of last year’s snowy, Arctic-cold winter is looking a little more likely today. Natural gas traders, still scarred by the memory, are bunkering in.

Buyers have been rushing into the gas market for a week on fears of a sequel to last winter’s Polar Vortex, which walloped the eastern half of the U.S. with brutally cold temperatures from the deep south up to New England. Many spent months dismissing that possibility as simple panic, but now meteorologists are getting more pessimistic.

Both Commodity Weather Group and WeatherBELL Analytics LLC released long-term forecasts this week showing a notably higher risk for a cold December. That was supposed to be relatively mild month this winter, balancing out a cold January and February. Now the whole winter is shaping up to be “pretty nasty,” WeatherBELL said.

That has propelled natural gas to a six-session rally. It’s rebounded nearly 18% since it hit its 2014 low last week. Gains of nearly 3% Tuesday are pushing it near a three-month high.

And traders are all wondering if the winter of 2015 will bring a repeat of 2014.

“I think it’s a reasonable risk,” said Matt Rogers president and meteorologist at Commodity Weather Group in Bethesda, Md. An early season burst of cold starting next week is already “really spooking a lot of people.”

More than half of all U.S. homes use natural gas as their heating fuel, making the natural gas market especially vulnerable to weather. Tepid demand had capped the market for four months and had bankers and investors fearing a glut by the spring. The new forecasts have flipped that script, at least temporarily.

Timothy J. Collins, director at Fairfield Advisors LLC in Madison, N.J., has had to get out of spread bets that depended on falling prices in January, he said. He is now trying to buy into positions that would benefit from rising prices that month, but he still thinks that record production will help balance out the fear of a Polar Vortex repeat, he said.

“I think people are overly sensitive to it,” said Mr. Collins, whose fund manages $35 million. “You know how they say the military is always trying to fight the last war? Well, we keep trading the last position.”

The rally could produce bargains for stock investors, said Jonathan Waghorn, co-portfolio manager at Guinness Atkinson Asset Management Inc. in London. Its $84-million fund holds Chesapeake Energy Corp., QEP Resources Inc. and Ultra Petroleum Corp, among other oil and gas producers that could benefit from rising gas prices balancing out free-falling oil prices.

“Gas is strong, yet the energy equities names are all getting hit,” Mr. Waghorn said. “If you believe the gas story, today’s giving you a good opportunity to pick up some energy names getting smashed by weak oil.”

As reported in Wall Street Journal

By
Timothy Puko

July 28, 2014 3:09 p.m. ET

NEW YORK—Natural-gas prices set a new eight-month low for the fourth time in six sessions, breaking an early-day run Monday as traders stayed focused on low prospects for demand.

Prices for the front-month August contract settled down 3.4 cents, or 0.9%, to $3.747 a million British thermal units on the New York Mercantile Exchange. August options expired Monday and the contract expires Tuesday. The more actively traded September contract settled down 2.2 cents, or 0.6%, to $3.765/mmBtu.

The day largely focused on technical trading as buyers and sellers kept moving against the momentum of the market, analysts said. After prices quickly hit an intraday high of $3.85/mmBtu, traders began to sell, likely focused on how cool weather is likely to limit demand in the weeks to come, said Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston.

The unseasonably cool summer has allowed consumers to use less air conditioning and the gas-fired electricity that fuels it. Producers put a record string of surpluses into storage, and gas prices have fallen about 20% since mid-June.

“If the weather stays mild and we don’t have any power demand, as it has been, then I don’t think we’ve hit a bottom,” Mr. Calder said.

Forecasts still show mild weather, including temperatures as much as eight degrees Fahrenheit below normal, lingering over the center of the country into the second week of August. Weather forecasts made only small changes over the weekend, with division over whether temperatures would be slightly warmer or cooler than previously expected.

Going Up

April 8, 2014

As reported in eia.gov

First the report:

  • Natural gas working inventories on March 28, 2014, were 0.82 trillion cubic feet (Tcf), 0.88Tcf (52%) below the level at the same time a year ago and 0.99Tcf(55%) below the five-year average (2009-13).  Henry Hub natural gas spot prices were volatile over the past few months, increasing from $3.95 per million British thermal units (MMBtu) on January 10 to a high of $8.15/MMBtu on February 10, before falling back to $4.61/MMBtu on February 27, and then bouncing back up to $7.98/MMBtu on March 4.  EIA expects that the Henry Hub natural gas spot price, which averaged $3.73/MMBtu in 2013, will average $4.44/MMBtu in 2014 and $4.11/MMBtu in 2015.

Bottom Line:

 

Natural gas prices are going up for foreseeable future. Reserves are down, they have to be replenished. The summer forecast is casting a shadow. Should they be looking at a warming trend with hotter temperatures during the summer months that will also prevent gas prices from dropping; since 30% of electricity is generated with natural gas.

As reported in Christian Science Monitor

By             , Staff writer / January 8, 2014

The polar vortex gripping the nation is as unpleasant for utilities and grid operators as it is for you. What does the polar vortex mean for your next utility bill?

What happens when much of the nation simultaneously reaches for the thermostat and turns up the heat? Energy prices rise.

With Americans shivering through a “polar vortex,” utilities and grid operators are scrambling to meet demand amid record low temperatures. A stressed power grid and constrained natural gas pipelines are already pushing up the price of electricity and natural gas on wholesale markets.

The good news is that consumers are relatively insulated from the polar vortex’s temporary price shocks (besides the obvious cost increase of turning the heat up for a prolonged period). The bad news is that if this is the first polar vortex of many to come, that prolonged grid strain and need for new infrastructure will almost certainly make its way into the bottom line of your monthly utility bill.

“Most retail customers are set up through regulated natural gas rates for this reason – so that short-term spikes in the spot price don’t automatically flow through,” says M. Tyson Brown, statistician at the US Energy Information Administration (EIA). “To the extent that this is a long-term trend – that really affects the price people pay.” Read the rest of this entry »

The New Normal

April 29, 2013

Since May of 2012

When the natural gas

Nymex (gas out of the ground)

Hit the floor at just under $2.04 a dth

We have seen the nymex

More than double!!!!!

Today the nymex is at $4.16 a dth

All this talk about……

Overflowing gas supplies

Storage levels being at a

5 year high

Has not dampened the market

I have had many conversations

With people in the energy industry

There is an….

Across the board agreement

That there is little substantiation

For this increase in pricing

Will prices go back down?

Hard to say…..

I do not see it dropping

To where prices were last May

Is having over a $4.00 nymex

The new normal

Stay tuned

For more insight contact george@hbsadvantage.com or call 856-857-1230

Visit us on the web http://www.hutchinsonbusinesssolutions.com

Turning Tables

March 21, 2013

Several weeks ago

I spoke about the projected

Increase of gasoline prices

Over the upcoming months

Experts were predicting the price

Of gasoline could reach…

The dreaded $4.00 a gallon mark

Before the summer hit

At the same time….

We were seeing

Natural gas prices

Continuing to fall….

The thought was….

That the Nymex (gas out of the ground)

May be heading…..

Back under $3.00 a decatherm

Well……..

The experts were wrong

The price of gasoline in NJ

Has been dropping

Over the past few weeks

Today I saw it listed for

$3.379 a gallon

(Don’t forget that last 9

You are not paying $3.38 a gallon)

Gasoline prices are….

Down about 25 cents

Do you think we can head into the low 3s?

Possibly sneak under $3.00 a gallon

With summer insight…

That could be a stretch…

Think of all those cars

Heading for the shore

Stay tuned…….

Natural gas prices

On the other hand…

Have jumped

Over the past 3 weeks

Near the end of February

The Nymex was around

$3.15 a decatherm

The talk was….

That the Nymex

Could be heading under $3.00 a decatherm

Surprise….Surprise….Surprise

With little or no warning

The nymex took off running

As of this writing

It is $3.965 a decatherm

Poised to break the $4.00 mark?

That is a 25% jump…

In less than a month

There is little or no support

To this Meteoric rise

Yeah, we had some cold weather

After all, it is winter

December and January

Were fairly mild

It did get cold in

February and March but…

The overall winter

Has not been that cold

Spring started yesterday

That tells me the weather will be….

Getting warmer

With warmer weather

The demand will drop

They are still dealing with

Abundant supplies

The nymex should settle down

And start dropping again

Don’t change the channel

We will keep you updated

With any breaking news

For more information contact us

george@hbsadvantage.com

Smart Solutions for Smart Business

Low prices for natural gas used to fuel power plants may help keep down rates.

By Tom Johnson, January 31, 2013 in Energy & Environment as reported in NJ Spotlight

For the past four years, consumers and many businesses in New Jersey have enjoyed a rare occurrence — a drop in the price of the electricity delivered to their homes from power plants around the region.

Might the trend continue? More will be known by the end of next week when the state Board of Public Utilities holds its annual online auction to purchase most of the electricity needed to power millions of New Jersey homes and businesses.

The results of the annual auction play a big role in determining whether electricity prices fall or rise each June in a state saddled with some of the highest energy costs in the nation.

But in the increasingly complex energy market, the auction is not the only factor: Transmission prices continue to rise and the state has increased the amount of electricity that power suppliers are required to buy from solar-energy systems, which costs more than electricity produced from more conventional power sources. Those and other factors can wipe out any savings achieved in the auction.

The auction typically involves the expenditure of more than $7 billion in ratepayer funds, although that amount may drop given the number of customers who have switched in the last year.

For the most part, state officials and industry executives were reluctant to predict the outcome of this year’s auction, but the general consensus was there should not be a drastic change in consumer prices, given the continued relatively low cost of natural gas.

‘’I don’t think there will be any major swings,’’ said Jay Kooper, the New Jersey chairman of the Retail Energy Suppliers Association, a group representing power suppliers who try to offer customers cheaper electricity than that supplied by the state’s four electric utilities.

With the steep drop in natural-gas prices, Kooper’s members have been much more successful in luring customers away from the state’s utilities, which buy the power they need to supply their customers in bulk in the annual auction held by the BPU. The cost of generating that electricity generally amounts to about two-thirds of a customer’s bill, with most of the rest of the cost tied to the expense of delivering the power over a utility’s transmission and distribution lines.

Natural-gas prices are still historically low, but they have bumped up a bit since last year, according to Tancred Lidderdale, a senior analyst at the Energy Information Administration, an arm of the U.S. Energy Department.

“Natural gas prices are still low, but they are not as low as last year,’’ Lidderdale said, noting that the price of the fuel, which is largely used to power generating stations in the region, was about $2.40 last January in one sector; prices were running at about $3.29 in future contracts in the same sector this month.

The price differential should not have a big impact on the New Jersey auction because of the way state regulators have structured it. Last year, prices for electricity purchased from the power suppliers fell from 1.1 percent to as much as 6.4 percent, depending upon the utility supplying the electricity.

Critics, however, said the price drops could have been steeper if the state’s utilities were not locked into the present system of buying electricity. Under that system, the utilities buy one-third of the power they need for customers each February. By doing so, they avoid the possibility of their customers be hit with huge price spikes when natural-gas costs rise rapidly, as happened during Hurricane Katrina.

The downside is that when natural-gas prices fall, customers do not gain the savings very quickly from their utilities, which has prompted more and more customers to shop around for cheaper energy rates. By the end of December, about 15 percent of more than 3 million residential customers had switched electricity suppliers, way up from the 5 percent who had switched in February.

New Jersey Division of Rate Counsel Director Stefanie Brand, who has argued for changes in the current auction structure, said the lower natural-gas prices may offset other factors driving up costs for consumers.

“Hopefully, it will be good news for consumers,’’ Brand said in a telephone interview. “I would love to see prices go down, but I can’t say I know what’s going to happen.’’

Hal Bozarth, director of the Chemistry Industry Council of New Jersey and a frequent critic of the state’s energy policies, said he would expect prices to go down, given the low natural-gas prices. “I’d be sadly disappointed to see prices go higher,’’ he said. “The rates are so high they are a disincentive for economic development.’’

In New Jersey, energy costs for the industrial sector usually rate as sixth- or seventh-highest in the country, about 60 percent higher than the national average, according to Bozarth.

Kooper, who said the state’s system of buying power needs some structural changes, remained hopeful. “I think there will be opportunities to shop for electricity,’’ he said.

Inching Up

June 1, 2012

While everyone has been keeping

 

Their eyes on gas pump prices

 

 

The big question

 

 

Will it go over $4.00 this summer?

 

 

 

Natural gas has been making its own mark

 

 

 

After nymex prices

 

 

Hit a 10 year low

 

 

In late April

 

 

 

We have seen the Nymex prices

 

Run up

 

 

 

Over 25%

 

 

During the last 30 days

 

 

 

You may have heard me say before….

 

 

 

You don’t know where the floor is

 

Until you passed it

 

 

 

We watched a slow steady fall of the nymex

 

Over a long period of time

 

 

Once it got to a point

 

Where investors may have thought

 

 

It may be…..

 

 

Too low

 

 

 

It shot up

 

 

 

 

Was it a market correction?

 

 

 

Analyst start talking about possibilities

 

Of having a hot summer

 

 

 

That will increase demand…

 

 

 

 

For 30% of the electric is generated

 

From natural gas.

 

 

 

Prices inch up

 

 

 

 

They also start looking at

 

Hurricane reports

 

 

 

 

That could affect the wells

 

In the Gulf of Mexico

 

 

 

Prices inch up more

 

 

 

 

They have even started to cap

 

Some of the natural gas wells

 

 

 

Hmmm

 

 

Supply / Demand

 

 

 

Cut down on the supply

 

 

That will get the

 

 

 

 

Prices to inch up

 

 

 

 

Higher

 

 

 

 

Market prices are still very competitive

 

 

 

It just that…..

 

 

In this market

 

 

 

Timing is everything

 

 

 

 

Natural gas and electric prices

 

 

Are still very competitive

 

 

 

If you have not participated in deregulation

 

Now is the time…

 

 

To lock in on the savings

 

 

 

Under contract

 

 

 

Now is the time to start looking

 

To lock in your renewals

 

 

 

 

To all HBS customers

 

 

Please take my phone call

 

 

 

 

To learn more contact

 

 

george@hbsadvantage.com

 

Visit us on the web www.hutchinsonbusinesssolutions.com