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Open Market Energy - Market Update - 12/10/2018
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Open Market Energizer
Contents:
Trading Highlights for Natural Gas & Electricity
Electric Pricing Trend
Gas Pricing Trend
Summary of Natural Gas Storage Report
Degree Days
Trading Highlights for Natural Gas & Electricity
Trading Mayhem

Energy prices traded in a relatively tight range during the first ten months of 2018.

However, mayhem has now taken over the trading floor.

Last week, energy prices crept up again. For this seven day report period (Friday, Nov. 30, 2018 to Friday, Dec. 7, 2018), the 12 month gas price increased by 2.4% and the 12 month electricity price increased by 1.83%.

We have reported a weekly price increase in four of the last five pricing reports.

If you are keeping score, from the start of the heating season on Nov. 1, 2018 to Dec. 7, 2018, the 12 month price for natural gas on the NYMEX has increased by 14.8%, and the 12 month price for peak power on the regional grid has increased by 8%.

Energy prices were less volatile during the first ten months of 2018 because the traders were focused on record high gas supplies coming from the gas producers.

*Natural gas production set an all-time record high in 2017 averaging 74.7 Bcf per day.

*During the first nine months of 2018, EIA data shows that gas production averaged a record high 81.8 Bcf per day. December production has averaged a whopping 86 Bcf per day.

However, the unusually cold start to November has made the energy traders switch their focus from record high supplies to record high demands.

*According to NOAA, the average temperature in the Lower 48 states for this past November was the 27th coldest in the last 124 years. What a difference a year can make. The national average temperature in November 2017 was the 117th warmest in the last 123 years.

*According Gas Daily, “LNG exports from the Lower 48 states have grown to 4.5 Bcf/d, a substantial jump from the 2017 average of 2.2 Bcf/day.” LNG exports are at a record high and are expected to double their size by the end 2019.

Pricing Trend Lines
Gas Pricing Trend

Electric Pricing Trend

Summary of EIA’s Weekly Natural Gas Storage Report
Released on December 7, 2018 – Storage Deficit Continues To Grow
Last Thursday, the Energy Information Administration (EIA) recorded a withdrawal of 63 Bcf from the storage caverns. This withdrawal was 8.6% greater than the five-year average pull of 58 Bcf. This was the third consecutive withdrawal of the heating season which exceeded the five-year average.

We entered the heating season on Nov. 1, 2018 with storage levels that were 16.2% below the five-year average. After five weeks of colder than normal temperatures, the storage deficit has actually gotten worse. As of last week, the natural gas storage levels were 19.5% below the five-year average.

Degree Days

Open Market Energy LLC

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Open Market Energy, LLC
7625 Wisconsin Avenue
Bethesda, MD 20814
(240) 482-4729
info@openmarketenergy.net