Washington Gas Energy Services: A Washington Gas Affiliate Complany
Volume 10, Issue 16
We Know Energy
April 20, 2012 Energy Update
In this Issue
Editor's Note
Supply and Demand Are Out Of Balance For Now
Spotlight on Green Energy
WGES Provides Green Energy Products to Mandarin Oriental, D.C.
Natural Gas Fundamentals
Natural Gas Storage At Record High Level: Data Released April 19, 2012
Baker Hughes Rotary Rig Count For Natural Gas
NYMEX Natural Gas Monthly Settlements For the Past 12 Months
NYMEX Values Per Month For the Forward 12 Months
NYMEX Graph For Natural Gas - 12 Month Average Price Per Therm at the Well-Head
PJM Electricity
Graph - PJM 12-Month Average Peak Power Price
Local Heating Degree Days*
Recent Features
WGES Renewable Energy Products Are Now Green-e Energy Certified (April 6, 2012)

New MSN Video Features a WGES Customer's Green Power Commitment (March 23, 2012)

WGES' Parent Company Announces Plans to Jointly Develop 200-mile Interstate Gas Pipeline (March 2, 2012)


WGES Customers Show How Small Changes Make a Big Difference (Jan. 27, 2012)


D.C.'s Dumbarton House Reduces its Carbon Footprint with Purchase of Carbon Offsets from WGES (Dec. 30, 2011)


Our New Wind Power Partners
Green Power Leadership Award Winner - U.S. Department of Energy

Panera Bread of Maryland (Lemek LLC)
Calvary Baptist Church
Mountain View Community Church
Caser Chavez Public School
PB Dye Golf Club
Behnke Nurseries
Townes of North Creek
Victory Racing Plate Company
Village Management, Inc.
Mt. Airy Bicycles
College Park Bicycles
Donatelli Development
Blue Ocean Realty
Mandarin Oriental
Bank of Georgetown
Embassy of Bosnia Herzogovina
Baltimore International College Foundation
The Shakespeare Theatre Co.
Kaiser Foundation Health Plans of Mid-Atlantic States

Visit wges.com/partners for full list of WGES Wind Power Partners.

To find out more about a green power purchase for your organization, call 703-793-7578, or visit wges.com/commercialwind.

For more information, contact your WGES Account Manager or wges_lgc@wges.com.
Editor's Note
Supply and Demand Are Out Of Balance For Now
Week in review for period of April 13 -19, 2012

Natural gas and electricity prices continue to hover near a 10-year low thanks to an oversupplied natural gas market.  For this seven-day report period, the 12-month average price for natural gas on the NYMEX fell 4% and the 12-month average price for peak power on the PJM fell 1.7%.

The natural gas market is oversupplied thanks to record high production levels and the fourth warmest winter on record. The mild weather limited this year's heating demand and minimized the amount of gas that was withdrawn from storage. We are entering spring with a record gas surplus in storage. The gas surplus over the five-year average sits at 58%. 

In addition to the record storage levels, natural gas production is at record high levels even though the natural gas rig counts are dropping. The natural gas rig count is 29% lower than last year at this time. However, we see increased production coming from the technological advances in shale gas drilling. In addition, natural gas is a by-product of the wells that are searching for oil. The oil-directed rig counts are 50% higher than last year at this time because oil drilling is financially attractive.

Analysts are not sure how long the natural gas market will be over supplied. Producers are beginning to shut -in their gas wells, and many power plants are switching from coal to natural gas.  According to the Energy Information Administration, natural gas is now replacing coal as the fuel used in electricity generation in all parts of the country because natural gas is cleaner and less expensive than coal.

Another factor that could balance demand with supply is the global liquid natural gas market. Some energy players want to liquefy our natural gas surplus and then export the gas to the overseas global markets. This endeavor would likely place upward pressure on demand and prices.

For now, energy demand is low, natural gas production is high, and natural gas and electricity prices are hovering at a10-year low.

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