Hi There!

"Renewable energy in general is very, very susceptible to rising interest rates and offshore wind, even the most of all of the renewable energy sectors because it's so capital intensive. Our fuel is free, we say, but our fuel is really the cost of capital because we put so much capital out upfront.”

David Hardy

Orsted Americas CEO David Hardy in a comment to Bloomberg

Azi Feifel

COO PROSPECT RESOURCES

Trends in the Energy Market

AUGUST 2024

Current Market News

Prompt-month NYMEX settled at $2.02 / MMbtu on August 26th. Natural gas strip prices for 2025-2029 are: $3.24, $3.62, $3.69, $3.63 and $3.58 respectively.
Natural gas production has risen modestly. Production has recently been just over 101.6 Bcf per day, down around 1 Bcf from the same period last year.
Demand for electric-power generation is a primary driver for natural gas price variation. Demand for electric power generation is strong, but has peaked for the season, averaging 46.9 Bcf per day this month, down around 0.5 Bcf from the same period last year.
A strong heat wave in the Midwest peaks this week and will flow to the east coast later this week. Next week temperatures revert to a bit above normal on a seasonal basis. The outlook for September is above normal nationally.
As of the 8/22 EIA storage report, natural gas inventories continue to diminish slightly; but are still 7.2% higher than last year and 12.6% higher than the 5-year average.

Questions about market trends? Click HERE to submit.

And yet more...

WTI futures have seen a lot of movement, up and down, prompt-month crude settled at $74.83 per barrel, up $1.82/bbl as of August 26th.
Despite near-term softness, the geopolitical tensions remain in this market providing the potential for upside and "Bullish" outlook in crude oil.
The economy is in neutral. U.S. home-price gains outpace inflation with a 5.4% annual increase. There is still an affordability problem at play and sales have been relatively muted.
New data shows US job growth has been far weaker than initially reported, 818,000 fewer jobs in March of this year than were initially reported. Most "Fed watchers" are expecting a rate cut by October.
Power forward curves through 2028 have definitely been trending down with an upturn at the end of August throughout much of the country. ERCOT prices are definitely falling as the additional "Renewables" installations have displayed high reliability.

Global LNG Supply Additions

Natural Gas Intel

The world is likely to be awash in LNG later this decade, but the surplus isn’t expected to last forever and divisions over how long the market would take to balance are coming into sharp relief.

Read Article

♦♦♦ CURRENT NEWS ♦♦♦

Political Climate Impacts the Energy Sector

ELECTRICITY DEMAND:

DOE Outlines Tools and Technologies to Help Industry Leaders and Partners Meet Growing Energy Demand

Series of DOE Resources and Assistance Programs Showcase How Rising Electricity Demand from Data Centers, Electric Vehicles and a Manufacturing Boom Spurred by the Investing in America Agenda Can be Met with Clean, Reliable, Affordable Power.

ENERGY POLICY:

Energy Department Awards Prizes to Transform the Electric Grid, Give U.S. Utilities New Analytic

This prize, which has two phases, connects utilities with interdisciplinary teams of software developers and data experts to transform energy sector digital systems through data analytics, processing, quality assurance, storage, and deletion. The prize goal is to mitigate reliability, resilience, and security risks to U.S. critical infrastructure to improve grid operations and accelerate technology integration. 

EIA :

Electric Power Monthly

Data in the August 2024 Electric Power Monthly (EPM) are for June 2024, when net generation in the United States increased 5.6% from May 2023. Consumption of natural gas for power generation was up 4.3% compared with the previous year. The average residential retail price of electricity was up 1.7% from May 2023.

U.S. GAS:

U.S. Oil, Gas Drilling Activity Declines

Julianne Geiger

The total number of active drilling rigs for oil and gas in the United States fell again this week, according to new data that Baker Hughes published on Friday.

U.S. SEASONAL OUTLOOK:

What is the outlook for U.S. natural gas inventories at the end of injection season?

In the latest Short-Term Energy Outlook, the EIA forecast that U.S. working natural gas inventories will be 3,954 billion cubic feet (Bcf) by the end of October, the most natural gas in U.S. storage since November 2016. They forecast less-than-average cumulative injections for the rest of the injection season (through October) because inventories were relatively well supplied in March and because they expect more U.S. consumption of natural gas than average this summer and relatively flat natural gas production.

WIND ENERGY:

U.S. wind generation hit record in April 2024, exceeding coal-fired generation

Electricity generation from wind established a new record in the United States in April, and wind generation exceeded coal-fired generation in both March and April, data from July 2024 Monthly Energy Review show.

CAPACITY:

U.S. power grid added 20.2 GW of generating capacity in the first half of 2024

According to the latest Preliminary Monthly Electric Generator Inventory, developers and power plant owners added 20.2 gigawatts (GW) of utility-scale electric generating capacity in the United States during the first half of 2024. This new capacity is 3.6 GW (21%) more than the capacity added during the first six months of 2023. Based on the most recently reported data, developers and owners expect to add another 42.6 GW of capacity in the second half of the year.

FORCAST:

Permian production forecast growth driven by well productivity, pipeline capacity

In the latest Short-Term Energy Outlook (STEO), the EIA forecast that crude oil production in the United States will grow to an average of 13.7 million barrels per day (b/d) and marketed natural gas production will grow to an average of 114.3 billion cubic feet per day (Bcf/d) in 2025. Most of the forecast growth in oil and natural gas production comes from the Permian region of western Texas and eastern New Mexico, where we expect productivity gains, new and expanded infrastructure, and high crude oil prices will support rising production.

♦♦♦

Prior Newsletters