Washington Gas Energy Services: A Washington Gas Affiliate Complany
Volume 10, Issue 22
We Know Energy
June 1, 2012 Energy Update
In this Issue
Editor's Note
Prices Fall For the First Time in Six Weeks
Natural Gas Fundamentals
Natural Gas Storage: Surplus Shrinks For Fifth Week in a Row. Data Released May 31, 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 Cooling Degree Days*
Recent Features
WGES and Sterling Planet Donate $126,000 to the Chesapeake Bay Foundation’s Carbon Reduction Fund; Help Plant 1,500 Trees in Frederick, Md. (April 27, 2012)

WGES Provides Green Energy Products to Mandarin Oriental, D.C. (April 20, 2012)

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
Prices Fall For the First Time in Six Weeks
Week in review for period of May 25-31, 2012

Over the five weeks prior to this seven-day report period, the 12-month average price for natural gas on the NYMEX had risen 20% and the 12-month average price for peak power on the PJM had risen 8.8%. Surprisingly, the upward trend was noticeably reversed this week. For this report period, the12-month average price for natural gas on the NYMEX fell 3.7%, while the 12-month average price for peak power on the PJM fell 1.6%.

We were surprised to see prices fall this week given the fact that weather forecasters were predicting above-average temperatures east of the Mississippi for the next 8 to 14 days. The onset of hot weather usually places upward pressure on prices because the demand for electricity increases as more people turn on their air conditioners.

It will be interesting to see how much the hot weather impacts the natural gas and electricity prices this year as many coal-fired power plants are switching to natural gas fuel. The Energy Information Administration expects coal demand at the country's power plants to decline from 42% to 36% this year. On the other hand, EIA expects electricity generation from natural gas to increase from 25% to 31% in 2012. Increased demand for natural gas could place upward pressure on both electricity and natural gas prices.

Another variable to watch is the natural gas storage surplus. Although storage levels are still well above the five-year average, the natural gas storage surplus has shrunk for the fifth week in a row. Since March 8, 2012, the natural gas surplus over the five-year average has shrunk from 51% to 34.6%.

Natural gas and electricity are two of the most volatile commodities in the world because dp many factors influence the direction of prices. However, one of the biggest variables to watch is the weather. Stay tuned. Summer officially starts on June 20.

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