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Washingto Gas Energy Services: A Washington Gas Affiliate Complany
Volume 8, Issue 28
We know how to deliver energy.
July 10, 2009 Energy Update
In this Issue
Editors Note
Week in review for period of July 3, 2009 to July 9, 2009.
Natural Gas
EIA Gas Storage Update
Baker Hughes Rotary Rig Count
NYMEX Natural Gas Monthly Settlements
NYMEX Values: Thursday, July 9, 2009
NYMEX 12-Mo. Avg. Price Per Therm at the Well-Head
PJM Electricity
PJM 12-Month Average Peak Power Price
Weather
Local Cooling Degree Days*
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Editors Note
Week in review for period of July 3, 2009 to July 9, 2009.

Falling crude prices were the main story again this week. Crude oil prices have fallen 18% in the last four weeks. They fell from $72/barrel to $60/barrel.  Declining crude prices placed downward pressure on natural gas and electricity prices this week. The 12 month average price for natural gas at the well-head fell 4.7% and the average 12 month price for peak power on the PJM fell 5%.  These price declines were tied to the recent perception that the economic recovery may not be as swift as predicted.  The bottom line is that electric prices and natural gas prices continue to hover at a five year low because demand is low and inventories are well above the 5 year average. However, at some point (probably in 2010),  many analysts believe that  resurgent demand coupled with the large production cuts in the natural gas rig counts will begin to place upward pressure on energy prices.  Note: On  May 1, 2009, natural gas inventories were 3% above the five year average. Now gas inventories are 19% above the five year average. Are production cuts beginning to make an impact on storage levels? Stay tuned.

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Natural Gas
EIA Gas Storage Update

 

 Current Week

Last Week 

Net Change

 Last Year 

 5 Year

 

 Stocks (Bcf)

Stocks (Bcf)

 (Bcf)

Stocks (Bcf)

 Average (Bcf)

 Total Lower 48

2,796

2,721

75

2,195

2,344

Storage Update:  According to EIA Estimates, working gas in storage for the week ending July 3, ’09 was 2,796 Bcf following this week’s smaller than expected injection of 75 Bcf.  Inventories are 27.4 % above last year’s levels. (Note: On May 1,’09 we were 34% above last year’s levels.) We are 19.3% above the 5 year average.

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Baker Hughes Rotary Rig Count
Drilling Rig Update: Active rig count released by Baker Hughes for week ending July 2 was 688 rigs.  This count is 851 lower than the count reported this same week last year.  We are now 47% below the 5-year avg. rig count of 1310.
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NYMEX Natural Gas Monthly Settlements
(Price per therm at the well-head)

Aug-08

$0.9217

Dec-08 

$0.6888 

Apr-09 

$0.3631

Sep-08

$0.8394 

Jan-09 

$0.6136 

May-09 

$0.3321

Oct-08

$0.7472 

Feb-09 

$0.4476 

Jun-09 

$0.3538

Nov-08 

$0.6469

Mar-09  

$0.4056 

July-09 

$0.3939

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NYMEX Values: Thursday, July 9, 2009
(Price per therm at the well-head)

 Aug-09

 $0.3408

Jan-10

$0.5434

Jun-10

$0.5504

Sep-09

 $0.3526

Feb-10

$0.5471

July-10

$0.5624

 Oct-09

 $0.3734

Mar-10

$0.5424

12-month

$0.4870

 Nov-09

 $0.4426

Apr-10

$0.5354

11/09-3/10

$.51774

 Dec-09

 $0.5132

May-10

$0.5404

Crude oil

$67/bl.

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NYMEX 12-Mo. Avg. Price Per Therm at the Well-Head
(excludes Interstate Transportation)
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PJM Electricity
PJM 12-Month Average Peak Power Price
On-Peak 1 Year Forward Price

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Weather
Local Cooling Degree Days*

 

Local Cooling Degree Days* 

 

May-09

Jun-09

                 

     

 Actual

93

272

        

       

        

        

 Normal

107

304

  

 

 

 

 Departure from Normal

15.1%

11.8%

 

 

 

 

Cooler

Cooler

 

 

 

 

 

* Cooling degree days are calculated by comparing the day’s average temperature to a 65 degree baseline.  If the average temperature is below 65, there are no cooling degree days that day.  If the average temperature is greater than 65 degrees, then subtract 65 from the average temperature to find the number of cooling degree days

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