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Washingto Gas Energy Services: A Washington Gas Affiliate Complany
Volume 9, Issue 33
We know how to deliver energy.
August 20, 2010 Energy Update
In this Issue
Editors Note
Week in review for period of August 13, 2010 to August 19, 2010.
Natural Gas
EIA Gas Storage Update
Baker Hughes Rotary Rig Count
NYMEX Natural Gas Monthly Settlements
NYMEX Values: Thursday, August 19, 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 13, 2010 to August 19, 2010.

For this seven day report period, energy prices fell for third straight week. The 12 month average price for natural gas at the well-head fell 3%, and the average 12 month price for peak power on the PJM fell 2%.  Since July 29, 2010 natural gas prices have fallen 9% and electricity prices have fallen 5.5%. Crude oil has dropped 10% in the last two weeks. During this past June and July, the hot summer temperatures kept upward pressure on energy prices as gas was diverted from the storage fields to the electric generation plants. However, too many other factors have recently surfaced and are now placing downward pressure on energy prices. The recent price decreases are related to the lack of hurricane activity in the Gulf, a sluggish economy and the robust natural gas supplies that are now coming from the newly discovered shale piles in Pennsylvania. Even though the recent trend lines for energy prices are down, energy prices are still trading within a reasonably tight band as you can see from the graphs below. The wrestling match is not over.

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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

3,012

2,985

 27

3,197

2,816

Storage Update:  This week’s injection was 27 Bcf. The injection was below the 5 year avg. injection of 50 Bcf and below last year’s injection of 54 Bcf.  We are 5.8% below last year’s levels.  As summer temperatures drop, less gas will be burned for electric generation and more gas will go into storage. Luckily we are 7.0% 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 8/13/10 was 992 rigs which was a net increase of 9 rigs.  The rig count is 304 higher than the rig count reported this same week last year. However, we are 21% below the 5 year average rig count of 1,257.

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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 19, 2010
(Price per therm at the well-head)

Sept-10

$0.4171

Feb-11

$0.4793

July-11

$0.4737

Oct-10

$0.4205

Mar-11

$0.4717

Aug-11

$0.4787

Nov-10

$0.4402

Apr-11

$0.4607

12-month

$0.4600

Dec-10

$0.4663

May-11

$0.4629

11/10-3/11

$0.46770

Jan-11

$0.4810

June-11

$0.4678

 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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