"We are like tenant farmers chopping down the fence around our house for fuel when we should be using Nature's inexhaustible sources of energy – sun, wind and tide.... I'd put my money on the sun and solar energy. What a source of power! I hope we don't have to wait until oil and coal run out before we tackle that.".
Nikola Tesla
American inventor and electrical engineer
Azi Feifel
COO PROSPECT RESOURCES
Trends in the Energy Market
JUNE 2024
Current Market News
The general upward bullish trend in natural gas has persisted for several weeks as production cuts, LNG exports, and the arrival of summer are working to mop up the excess supply that was prevalent in the first quarter and beginning of the second quarter. Prompt-month NYMEX settled at $2.79 / MMbtu on Monday, June 17th. Futures rise to just over $4.00 / MMBtu mid-winter.
Natural gas production ishas risen modestly. production has recently been just over 100 Bcf per day after hitting 97.5 Bcf per day in early/mid May
Demand for electric-power generation is the primary driver for natural gas in the near and mid-term market and the weather throughout the country has taken a decided shift to summer.
The weather forecast has shifted over the past week moving to a "hottest summer since 1950" outlook..
Natural gas storage inventories remain quite high; 13.9% higher than last year and 24% higher than the 5-year average.
And yet more...
WTI prompt-month crude bumped up on Monday, June 17, settling at $80.43 per barrel, up $1.88. Crude oil is up about 4% this past week. Year to date, gasoline prices are up about 14%.
Economy - The economy is in neutral. The Fed held rates steady in its last meeting. Consumer prices were up in May by 3.3% over the same period last year. The ten year Treasury Note fell to 4.3% last week. Non-farm payrolls expanded by 272,000 for May, well ahead of estimates of 190,000. Job gains were concentrated in health care, government, and leisure and hospitality.
Power forward curves through 2028 have definitely been trending down slightly throughout much of the country. Prices are up in New England, and ERCOT remains quite high 2024 is still a pretty good mid-year bargain, although the coming summer has people concerned about supply safety margins.
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.
With summer heating up, Donald Trump promising more deregulation if he wins, and record storms causing blackouts leaving multitudes in sweltering darkness, OilPrice.com/Energy decided to seek timely guidance about electricity’s…
This summer—June through August—EIA expects that residential customers’ monthly electricity bills will average $173 in the United States, slightly higher than last summer’s average of $168. EIA expects that more electricity consumption, resulting from their assumption that summer temperatures will be warmer this year, will be partially offset by lower residential electricity prices in most areas of the country.
Beginning with this June 2024 Short-Term Energy Outlook (STEO), EIA is including new regional crude oil and natural gas production forecasts to provide a more complete breakout of U.S. Lower 48 (L48) states production data.
U.S. energy firms this week cut the number of oil and natural gas rigs operating to the lowest since January 2022, energy services firm Baker Hughes said in its closely followed report on Friday.
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BUSINESS:
US Mountain Valley natural gas pipeline begins operations -Reuters - EIA
On June 11, the Federal Energy Regulatory Commission (FERC) authorized the Mountain Valley Pipeline (MVP) to begin operations. MVP, 303 miles long, can move up to 2.0 billion cubic feet per day (Bcf/d) of natural gas from Wetzel County, West Virginia, to an interconnection with Transcontinental Gas Pipeline’s (Transco) compressor station 165 in Pittsylvania County, Virginia. Transco delivers natural gas through a 10,000-mile interstate transmission pipeline system extending from South Texas to New York.
