Friday, December 18, 2015
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Gas Markets

Market Watch

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US January gas futures ended a seven-session 31.5¢, or 15.2% slide today, primarily because the market had become so oversold, it forced a rebound.

“Not since 1991, yes the very beginning of trading Nat Gas, has the Daily RSI [Relative Strength Index] had a lower close on a daily basis than yesterday,” a EcomEnergy analyst noted Friday.

The RSI gauges technical momentum by comparing the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. For natural gas, the indicator is off the charts after prices have failed to close above the previous day's high since Nov. 5, he said.

The January contract rose 1.2¢ to $1.767 per million Btu and traded between $1.684 and $1.805 (Futures contracts). The contract lost 22.3¢, or 11.2% for the week. Meanwhile, the 12-month strip was up 0.9¢ at $2.219, while the 2017 strip rose 1.1¢ to $2.714.

The latest weather forecasts show abnormally warm temperatures in the eastern two-thirds of the country through New Year’s Eve. However, some forecasts are calling for much colder weather in the area to begin mid-January and into February.   

 

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Cash prices at the Henry Hub lost 5¢ to average $1.70, while Transco Station 65 lost 4¢ to average $1.69. In the northern tier markets, Transco zone 6 New York went up 8¢ to average $1.82, while the Chicago citygates declined 14¢ to average $1.79. In the West, cash prices at Opal, Wyoming, fell 12¢ to average $1.88, while the SoCal Citygate advanced 1¢ to average $2.36 and the PG&E Citygate lost 1¢ to average $2.43 (Daily spot prices).

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More bearish news came from nuclear units continuing to wrap up refueling and maintenance outages. NGW data shows demand for gas-fired power if it were to replace off-line nuclear capacity, fell to an average 1.85 Bcf/d last week, compared to 2 Bcf/d for the previous week (Nuclear outages).

On a bullish note, Baker Hughes reported the Lower-48 gas-directed rig count was down by 17, bringing the total to 168 rigs (Rig count).

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January WTI crude fell 22¢ today to $34.73/bbl and was down 89¢ for the week. Meanwhile, Baker Hughes reported oil-directed rigs were up by 17, bringing the total to 541.


Natural Gas Spot Prices

Critical Notices

Prompt-Month Gas Forwards

Natural Gas Futures Contracts

Briefly Noted

BG Group and Energy Transfer Partners have gained approval from the Federal Energy Regulatory Commission for their planned LNG export terminal in Lake Charles, Louisiana. The two companies said that with this OK, they can begin preparations to make a final investment decision in 2016 on the project, which could export around 15 million tons of LNG a year, or roughly 2 billion cubic feet of gas per day. Operations could begin as soon as 2020.

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Union Gas has received approval from the Ontario Energy Board for a 15-year contract to bring in gas on the proposed Nexus gas system beginning in November 2017. The proposed $2 billion, 255-mile NEXUS project, being developed by Spectra Energy and DTE Energy, would ferry up to 1.5 Bcf/d of gas from eastern Ohio to a connection with the existing Vector Pipeline, which flows from Michigan to the Dawn gas hub in southern Ontario.

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Dow Chemical's propane dehydrogenation unit located at the company’s Oyster Creek site in Freeport, Texas, has begun commercial operations. Dow said the unit is part of its overall plan to integrate its US operations with low cost feedstocks from increasing supplies of shale gas.

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Entergy said its wholesale generation division, Entergy Wholesale Commodities, has closed on the sale of its 583-megawatt Rhode Island State Energy Center in Johnston, Rhode Island, to Carlyle Power Partners. Entergy announced Oct. 8 that it had entered into an agreement to sell the natural gas-fired, combined-cycle plant to Carlyle. The base sales price, excluding adjustments, is about $490 million. 

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In a joint filing with the Georgia Public Service Commission, Southern and AGL Resources asked the regulatory agency to OK the planned merger of the two companies. The combination would unite two Georgia-based companies that together serve about 9 million electric and gas utility customers in nine states. If the deal goes through, it will create a single entity that has: 11 regulated electric and natural gas distribution companies; operations of nearly 200,000 miles of electric transmission and distribution lines; more than 80,000 miles of natural gas pipelines; and about 46,000 MW of electricity generating capacity. 

 

 


Fuel Competition

Spot Cash Electricity Prices

Natural Gas/Power Spark Spreads

Gas Needed to Replace Offline Nuclear Capacity

 


Alternative Energy

Baker Hughes Rig Count

Weather

Weather

Contact

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