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Washingto Gas Energy Services: A Washington Gas Affiliate Complany
Volume 10, Issue 10
We Know Energy.
March 18, 2011 Energy Update
In this Issue
Editors Note
Energy Prices Spiked Upward This Week
Renewable Energy
DowntownDC BID Taps Into Renewable Energy Source
Natural Gas
EIA Gas Storage Update - Data Released March 17, 2011
Baker Hughes Rotary Rig Count
NYMEX Natural Gas Monthly Settlements For the Past 12 Months
NYMEX Values For the Forward 12 Months:
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
Futures Contract
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CleanSteps(SM) Windpower
Editors Note
Energy Prices Spiked Upward This Week
Week in review for period of March 11-17, 2011

During the three weeks of February 18, 2011-March 10, 2011, natural gas and electricity prices were relatively flat. However the flat period ended this week. During this seven day term, natural gas prices rose 7.7% and electricity prices rose 6%. Even though the natural gas inventories are still above the five year level and the energy demands for heat are almost over (the spring equinox arrives Sunday, March 20, 2011), energy prices spiked upward this week. The price spikes were blamed on the instability in the Middle East and the tsunami and earthquakes in Japan. Energy markets do not like instability and uncertainty. These variables normally place upward pressure on energy prices. All eyes are focused on the events occurring overseas for now.

 

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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 on the WGES Website.

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Natural Gas
EIA Gas Storage Update - Data Released March 17, 2011

 

 Current Week

Last Week 

Net Change

 Last Year 

 5 Year

 

 Stocks (Bcf)

Stocks (Bcf)

 (Bcf)

Stocks (Bcf)

 Average (Bcf)

 Total Lower 48

1,618

1,674

 -56

1,617

1,595

Storage Update:  The net withdrawal of 56 Bcf was much larger than expected and placed some upward pressure on natural gas prices this week. This week’s reported withdrawal of 56 Bcf was greater than last year's withdrawal of 25 Bcf. This larger than expected withdrawal nearly eliminated the gas surplus we had accrued during the first few weeks of March. Inventories are 1.4% above the 5 year average, but we are only 1 Bcf or .06% above last year’s levels. Even though natural gas prices rose this week, the good news is that inventories are still running a small surplus for now.

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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 3/11/11 was 882 rigs. This was a decrease of 17 rigs from the previous week.  The count is 45 lower than the count reported this same week last year. We are 28% below the 5 year average rig count of 1,224.

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NYMEX Natural Gas Monthly Settlements For the Past 12 Months
(Price per therm at the well-head)

This was the closing price of gas at the well head for each of the past 12 months. The closing price for a month occurs on the 3rd business day prior to the start of the month. 

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 For the Forward 12 Months:
Thursday, March 17, 2011

(Price per therm at the well-head)

Apr-11

$0.4158

Sept-11

$0.4423

Feb-12

$0.5030

May-11

$0.4234

Oct-11

$0.4476

Mar-12

$0.4975

June-11

$0.4299

Nov-11

$0.4653

12-month

$0.4545

July-11

$0.4369

Dec-11

$0.4907

11/11-3/12

$0.43771

Aug-11

$0.4405

Jan-12

$0.5043

 Crude Oil

$101/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
Futures Contract

What is a Futures Contract?

In finance, a futures contract is a standardized contract between two parties to buy or sell a specified asset (e.g. oranges, oil, gold) of standardized quantity and quality at a specified future date at a price agreed today (the futures price or the strike price). The contracts are traded on a futures exchange.

The future date is called the delivery date or final settlement date. The official price of the futures contract at the end of a day's trading session on the exchange is called the settlement price for that day of business on the exchange.

(Source: http://en.wikipedia.org/wiki/Futures_contract)

 

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