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Washingto Gas Energy Services: A Washington Gas Affiliate Complany
Volume 9, Issue 32
We know how to deliver energy.
August 13, 2010 Energy Update
In this Issue
Editors Note
Week in review for period of August 6, 2010 to August 12, 2010.
Natural Gas
EIA Gas Storage Update
Baker Hughes Rotary Rig Count
NYMEX Natural Gas Monthly Settlements
NYMEX Values: Thursday, August 12, 2010
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 August 6, 2010 to August 12, 2010.

For this seven day report period, energy prices fell for the second straight week. The 12 month average price for natural gas at the well-head fell 4%, and the average 12 month price for peak power on the PJM fell 1.9%.  Although prices fell, some analysts predicted a price increase after the year-to-year storage deficit for natural gas grew from 132 bcf to158 bcf this week. The price increase did not happen. Apparently this week’s price decline was tied to the following variables: The lack of hurricane activity in the Gulf, the cooler temperatures of September are only 17 days away and the world’s demand for fuel is growing at a slower than expected pace.  However, it is too early to say we are in a downward trend because the peak hurricane season is just starting. Plus some analysts are predicting a drop in the natural gas rig counts if prices remain at these low levels.  Additionally the government's ban on deepwater drilling will negatively impact supply if it remains in place. The good news is we are still near a five year low. This is a great time to look at the early renewal.

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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

2,985

2,948

 37

3,143

2,766

Storage Update:  This week’s injection was 37 Bcf. The injection was below the 5 year average injection of 39 Bcf and well below last year’s injection of 63 Bcf.  The year to year deficit continues to grow. We are now 5% below last year’s levels. The gas is being burned for electric generation and it is not going into storage. Luckily we are 7.9% above the 5 year average.

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Baker Hughes Rotary Rig Count

Weekly Drilling Rig Update:  Active rig count released by Baker and Hughes for week ending 8/6/10 was 983 rigs which was a net increase of 11 rigs.  The rig count is 306 higher than the rig count reported this same week last year. However, we are 22% below the 5 year average rig count of 1,258.

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NYMEX Natural Gas Monthly Settlements
(Price per therm at the well-head)

Sept-09

$0.2843

Jan-10

$0.5814

May-10

$0.4271

Oct-09

$0.3730

Feb-10

$0.5274

June-10

$0.4155

Nov-09

$0.4289

Mar-10

$0.4816

July-10 

$0.4717

Dec-09

$0.4486

Apr-10

$0.3842

Aug-10 

$0.4774

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NYMEX Values: Thursday, August 12, 2010
(Price per therm at the well-head)

Sept-10

$0.4296

Feb-11

$0.4957

July-11

$0.4873

Oct-10

$0.4315

Mar-11

$0.4875

Aug-11

$0.4922

Nov-10

$0.4573

Apr-11

$0.4743

12-month

$0.4746

Dec-10

$0.4848

May-11

$0.4764

11/10-3/11

$0.48452

Jan-11

$0.4973

June-11

$0.4815

 Crude Oil

$76/barrel 

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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-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

 Actual

201

473 

566

 

 

 

 Normal

107

 304

  456

 

 

 

 Departure from Normal

47.0%

 55.6%

19.4%

 

 

 

Warmer

 Warmer

Warmer

 

 

 

 

**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 day

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