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Energy Market Info
Current NYMEX
Oil, gas, electricity markets:
Energy
Markets
Natural Gas Storage:
EIA
Weekly Report
Storage Scorecard: View The Storage Scorecard
Natural gas chart: September 2008 Graph
Natural gas futures: Current
NYMEX Natural Gas Quotes
During the spring, summer and early fall (normally April through October), natural gas supply (domestic and imports combined) is greater than the demand, so excess supply is injected into storage for the winter months. During the winter months, demand exceeds supply and withdrawals are made from storage to cover the shortfall between higher weather-related demand and gas availability.
In Our Opinion
Crude is king of the energy world, but what happened to the $150/barrel prediction? It seems a bit odd to us that it took four months for the crude oil market to rise over $40 and only two weeks for the market to drop $20. Was the run-up based upon actual pent up demand for crude oil on the planet, and if so, was this demand satisfied in a month’s time? Or that it took four months for the natural gas market to rise over $4 and only one month to drop that same $4.
And with so much electricity generation being gas-fired, electricity rates have also risen. Never since Hurricane Katrina, Rita and Wilma blew out the energy hub in the Gulf of Mexico (GOM) have we seen this much turmoil in the energy markets.
It does seem absurd and is difficult to imagine that the world “all of a sudden” realized it is out of oil, or is suddenly stretching supplies thinly across the globe. Rather, we believe the energy market is driven by speculators who have taken the opportunity to move the market to the precipice of economic collapse. And once there, has now decided to pull back for a breather.
One can probably point the finger of blame, but large fund speculators have become an integral part of our energy system and until such time as new laws are written, we expect to see fluctuations in the energy market of this past magnitude, or greater.
The current natural gas market fundamentals of supply and demand, with storage levels within the 5-year average, are NOT out of balance right now. We expect warmer weather will keep the natural gas NYMEX trading in the $9 range, and if storage remains below “full” as we near November 1st, we can envision $12 gas once again.
Our suggestion at this point in time, is to weigh your options and see what makes sense for your company’s business security. Most electricity and natural gas contracts may be structured with high or low risk factors figured into the equation. We are always supportive of companies who decide to fix partial volumes, by layering in fixed rate pricing to offset risk. You determine what side of the risk fence you belong and we will structure an agreement around those parameters.
Contact us: Give us a call or go to "Service Availability" page and contact us there. We’ll work with you to provide the supply and pricing you desire.
Remember: Trying to hit the bottom of the market is like trying to catch a goldfish bare handed while it swims in a 55 gallon container. Stay tuned, stay poised, follow rates lower and find a rate that works for you.
| The analysis contained herein is based upon
information gathered from industry analysts, publications, and other
market data, and Bmark Energy believes it to be reasonably accurate.
However, the opinions expressed here are subject to change based on
market and other conditions and Bmark Energy does not guarantee the
accuracy of the analysis. This information should be used for
informational purposes only and Bmark Energy will not be held liable
for any damages resulting from the use of this information. |
WHAT OUR ADVICE WAS IN EARLY 2003:
We urged companies to fix long-term rates out as far out as possible (3-5 years if possible.)
Fortunately many companies took our advice and were able to fix long term at sub $6 pricing. Not only have they avoided higher pricing over these past four years, they have also avoided this current pricing spike. Please see the graphs below.
There are a number of fundamentals that drive the cost of gas, as shown
here.
| Underground Storage |
Weather - Hurricanes |
Drilling Rig #s |
| LNG Future Forecasts |
El Nino |
OPEC |
| Manufacturing Activity |
Imports & Exports |
Fuel Switching |
Growth of Gas-fired
Electricity Generation |
Smaller wells with Shorter half-life |
Exploration & Production |
| Fund Managers |
Increased Construction |
Demand Destruction |
| NYMEX |
Mindset-Perceptions |
Pipeline Operations |
Incremental Electric Generation
Sources of Incremental Generation (1989 - 1997)
For most of 1990's, incremental electricity needs could be met primarily
through increased use of existing coal and nuclear capacity.
Sources of Incremental Generation (1997-2020)
U.S. now dependent upon expanded generation from gas-fired units for many
years to come.
Conversion Tables
| 1 CF (cubic foot) = approx 1,000 BTU's |
| 1CCF = 100 CF = 1 Therm |
| 1 Therm = 100,000 BTU's |
| 10 Therms = 1 MMBTU |
| 10 Therms = 1 MCF |
| 10 Therms = 1 Dekatherm |
| 1 MMBTU = 1 Dekatherm |
| 1 MMBTU x 1.054615 = GJ |
| GJ x 0.948213 = 1 MMBTU |
Electricity
As a rule, electricity pricing will be lower when natural gas pricing is
lower. If and when natural gas prices skyrocket, you can expect the same for
electricity rates. Normally all coal-fired generation comes on-line first,
followed by gas fired.
If one can follow the natural gas market into a dip one
may look to obtain lower priced electricity contracts.
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