Washington Gas Energy Services: A Washington Gas Affiliate Complany
Volume 12, Issue 1
We Know Energy
January 10, 2014 Energy Update
In this Issue
Editor's Note
Cold Weather Leads to High Spot Prices But NYMEX Traders Remain Calm
Natural Gas Fundamentals
Natural Gas Storage Update: Storage Levels Are Now 10% Below the Five-Year Average. Data Released January 9, 2014
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 Louisiana Well-Head
PJM Electricity
PJM Graph for Electricity - 12 Month Average Peak Power Price
Weather
Local Heating Degree Days*
Recent Features
Washington Gas Energy Services Acquires More Than 20,000 Electricity and Natural Gas Customers from Castlebridge Energy Group (November 1, 2013)


 



Washington Gas Energy Services to Offset Carbon Impact of Upcoming RETECH Conference (August 30, 2013)


 


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


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
Cold Weather Leads to High Spot Prices But NYMEX Traders Remain Calm
Week in Review for December 20, 2013 - January 9, 2014

Due to the extended holiday season, this week's newsletter covers a three-week period instead of our normal one-week period. In our December 19 issue we reported that both natural gas and electricity prices had risen for six weeks in a row.

However, the good new is that the upward trend in energy prices has been temporarily halted. Since December 19, 2013, the average 12-month price for natural gas on the New York Mercantile Exchange (NYMEX) actually fell 9% and the 12-month average price for peak power on the PJM fell less than 1%. This is surprising news, given the record cold temperatures we experienced earlier this week, courtesy of the Arctic air mass dubbed the "Polar Vortex."

Luckily, the monthly "futures prices" for natural gas and electricity were unable to sustain any price rallies during recent weeks. Energy traders appear to believe that today's record-high natural gas production levels and the booming build-out of new pipeline capacity in the Marcellus Shale region are adequate to meet the country's long-term energy needs.

But stay alert. The recent one-day cold snap that hit the U.S. reminded us of the price volatility that still exists in the energy sector. For example, this past Tuesday, January 7, temperatures along the eastern seaboard dropped to record lows and all 50 states experienced temperatures below freezing. This brief cold spell rocked the energy sector for a day. If you had to buy spot gas on Tuesday, you had to pay record-high prices of $7 to $10 per therm!

Where do "futures prices" go from here? Energy prices will no doubt  be impacted by the temperatures we experience for the rest of the winter season. The weather will determine the amount of natural gas we have in storage on April 1, 2014.

From November 1 to December 31, 2013, temperatures were 2% colder than normal. The cold weather has eliminated the natural gas storage bubble. As you may recall, we entered the heating season on November 1, 2013 with inventories 1.5% above the five-year average. However, storages ended this week 10% below the five-year average.

For now, energy traders are calm thanks to the record-high production levels in the natural gas and oil sectors. However, this growing storage deficit could place some upward pressure on energy prices if the trend continues. The upcoming weekend weather forecast calls for warmer, even balmy temperatures in the mid-Atlantic region. Enjoy the break from cold weather

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