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Washingto Gas Energy Services: A Washington Gas Affiliate Complany
Volume 10, Issue 9
We Know Energy.
March 11, 2011 Energy Update
In this Issue
Editors Note
Is This the Low Point For Electricity and Natural Gas Prices?
Renewable Energy
DowntownDC BID Taps Into Renewable Energy Source
Natural Gas
EIA Gas Storage Update - Data Released March 10,2011
Baker Hughes Rotary Rig Count
NYMEX Natural Gas Monthly Settlements
NYMEX Values: Thursday, March 10, 2011
NYMEX 12-Mo. Avg. Price Per Therm at the Well-Head
PJM Electricity
PJM 12-Month Average Peak Power Price
Weather
Local Heating Degree Days*
Word of the Week
Henry Hub
 

 

For more information, contact your WGES Account Manager or wges_lgc@wges.com.
CleanSteps(SM) Windpower
Editors Note
Is This the Low Point For Electricity and Natural Gas Prices?
Two weeks in review for period of February 25 - March 10, 2011

For this two week period of  Feb. 25, 2011 to  March 10, 2011 prices were relatively flat. Natural gas prices rose 1% and electricity prices rose 2%. Natural gas and electricity prices are range bound as you can see from the electricity and gas graphs included in this newsletter. Gas prices are hovering at this 8 year low and electricity prices are hovering at a 7 year low. Prices continue to hover at this low point because natural gas production is high (thanks to the discovery of shale gas) and demand is low. Energy demand is expected to shrink over the next two weeks as forecasters call for above average temperatures east of the Mississippi for the next 8-14 days.

Is this the low point?  There are a number of other variables that could start placing upward pressure on natural gas and electricity prices.  For example, the instability in the Middle East has caused crude oil prices to rise from $87/barrel to more than $102/barrel. This could start to impact natural gas and electricity prices. Additionally, the low price and abundance of natural gas is causing the US power industry to choose natural gas as the fuel of choice for producing electricity.  Increased gas consumption by the power sector could place upward pressure on prices.

Is this the low point? This is a good time to look at the early renewal strategy.

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Renewable Energy
DowntownDC BID Taps Into Renewable Energy Source

The DowntownDC BID's SAM headquarters building, located at 1229 New York Avenue, NW, and home to nearly 100 Safety/Hospitality and Maintenance (SAM) employees, is switching to wind power.  To reduce costs and dependency on carbon-based fuels that harm the environment, the DowntownDC Business Improvement District (BID) has contracted with Washington Gas Energy Services (WGES) to provide 100% CleanStepsSM WindPower to the Downtown SAM headquarters building. Read More

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Natural Gas
EIA Gas Storage Update - Data Released March 10,2011

 

 Current Week

Last Week 

Net Change

 Last Year 

 5 Year

 

 Stocks (Bcf)

Stocks (Bcf)

 (Bcf)

Stocks (Bcf)

 Average (Bcf)

 Total Lower 48

1,674

1,745

 -71

1,642

1,653

Storage Update:  Storages flipped from a deficit to a surplus this week as a smaller than expected withdrawal was reported  this week.  This week’s withdrawal was 71 Bcf which was well below last year's withdrawal of 112 bcf . The 5 year average withdrawal was 107 bcf.  It is interesting to note that during the month of February, the gas levels shrunk and fell beneath both last year's levels and the 5 year average. However, during the month March, the storage levels flipped from a defict to a surplus. Inventories are now 1% above the 5 year average and 2% above last year’s levels.

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Baker Hughes Rotary Rig Count

Weekly Drilling Rig Update:  Active rig count released by Baker and Hughes for the week ending 3/4/11 was 899 rigs. This was a decrease of 7 rigs from the previous week.  The count is 27 lower than the count reported this same week last year. We are 27% below the 5 year average rig count of 1,226.

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

Apr-10

$0.3842

Aug-10

$0.4774

Dec-10 

$0.4267

May-10

$0.4271

Sept-10 

$0.3651

Jan--11 

$0.4216

June-10

$0.4155

Oct-10

$0.3837

Feb-11 

$0.4316

July-10

$0.4717

Nov--10

$0.3292

Mar-11

$0.3793

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NYMEX Values: Thursday, March 10, 2011
(Price per therm at the well-head)

Apr-11

$0.3830

Sept-11

$0.4098

Feb-12

$0.4717

May-11

$0.3892

Oct-11

$0.4147

Mar-12

$0.4668

June-11

$0.3955

Nov-11

$0.4335

12-month

$0.4218

July-11

$0.4030

Dec-11

$0.4593

11/11-3/12

$0.40456

Aug-11

$0.4078

Jan-12

$0.4726

 Crude Oil

$102/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 Heating Degree Days*

 

Local Heating Degree Days* 

 

Nov10

Dec-10

Jan-11

Feb-11

Mar-11

April-11

 Actual

428

933 

965 

648

 Normal

477

775 

917 

742 

 

 Departure from Normal

10%

20% 

5% 

13% 

 

 

Warmer

Colder

Colder 

Warmer 

 

 

* Heating degree days are calculated by comparing the day’s average temperature to a 65 degree baseline.  If the day’s average temperature is above 65, there are no heating degree days that day.  If the day’s average temperature is less than 65 degrees, subtract the day’s average temperature from 65 to find the number of heating degree days for that day. 

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Word of the Week
Henry Hub

What Does Henry Hub Mean?

Henry Hub refers to a pricing point for natural gas futures on the New York Mercantile Exchange or NYMEX that relates to a particular spot on the natural gas pipeline located in Erath, Louisiana and owned by Sabine Pipe Line, LLC. The important hub connects four intrastate and nine interstate pipelines within the Southern United States.

(Source:  http://www.financialadvisory.com/dictionary/term/henry-hub/  )

 

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