Washington Gas Energy Services: A Washington Gas Affiliate Complany
Volume 12, Issue 27
We Know Energy
August 1, 2014 Energy Update
In this Issue
Editor's Note
Is this the bottom?
Natural Gas Fundamentals
Natural Gas Storage Update: 15 In A Row
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 Cooling 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
Is this the bottom?
Week in Review for July 25 - July 31, 2014

In the six previous updates we saw price decreases. In fact, since June 12, 2014, the 12-month strip price for natural gas on NYMEX dropped 16% and the 12-month average price for peak power on the PJM dropped 13.6%.       

However, for this seven-day report period energy prices closed flat. The average 12-month price for natural gas on the New York Mercantile Exchange (NYMEX)  closed at $0.389 /therm, almost identical to last week's closing price.  The 12-month average price for peak power on the PJM also closed flat relatively flat.

Though I risk sounding redundant, the storyline has not changed much over the last eight weeks. We are experiencing downward pressure on prices because supply is high and demand is low. So far this summer, we have not experienced any extended periods of brutally hot weather. As a result, the record gas production coming from the country's shale formations has been pumped into the storage caverns.  

We are refilling  the caverns at a record pace. On April 1, 2014, the storage fields were 55% below the five-year average. Today, the natural gas storage fields are running 21% below the five-year average. This rapid refill has kept downward pressure on prices.

Stay tuned. Some analysts think the storyline may be changing.  Analysts are reporting that natural  gas prices are now low enough to entice the power plant operators to switch their base load requirements from coal to gas. If this happens less gas will be available for the caverns. If the refill process slows down, it may be difficult for energy prices to continue their downward trajectory. 

Is this the bottom? According to NOAA, hot weather is on the way for the period of Aug. 8-14.  Weather is the wild card. This may be a good time to consider an early renewal strategy.

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