Bearish Withdrawal Prevents NYMEX from Rising

Bearish Withdrawal Prevents NYMEX from Rising

THE One Minute Energy Update for 3-7-24

NYMEX started the day flat. The 40Bcf Withdrawal Storage Report has NYMEX down a few pennies.

***#NYMEXDownSlightly #PG&EBasisUp #SoCalGasBasisUp #WeatherBearish #YouWillNeedCarbonOffsets ***

***NYMEX ****– NYMEX prices are down ever so slightly after two days of little to no movement. *

***NYMEX pricing so far today - ****Open = $1.92, High = $1.95, Low = $1.87, Current = $1.87. NYMEX prices are down approximately $0.05 from 1 week ago and down approximately $0.70. from 1 year ago. *

NYMEX CALENDAR YEAR ESTIMATES* – 2024 = $2.61, 2025 = $3.51, 2026 = $3.80.*

2023 NYMEX Monthly average = $2.73. 2022 NYMEX Monthly average = $6.64. 2021 NYMEX Monthly average = $3.84. We remain well below the last 3-year averages at a 40+ month low.

*We are below the 50-day ($2.23), and above the 20-day ($1.74) and the 9-day ($1.84) average. *

RESISTANCE* – Starting @ $2.02/$2.09. *

THE PIVOT* @ $1.97.*

SUPPORT* - Starting @ $1.88/$1.82. *

BASIS* – Both PG&E and SoCal Basis prices are up again today. Waiting for the weather to shift back to normal. We are nearing the time when we will be executing forward strips. BE READY!*

*The 2023 PG&E CG First of the Month Index averaged $9.83. The 2023 SoCal CG First of the Month Index averaged $10.95. The 2023 SoCal Border First of the Month Index averaged $8.14. We remain WELL BELOW the last 3-year averages. *

***LNG ****– Exports are back around 14Bcf/D. *

PRODUCTION/SUPPLY & DEMAND* – As of 3-6-24 - Production is down 3% so far in March ’24. ******Today’s Est. Supply = 106.0Bcf/D. Supply 7 Day Avg. = 107.37Bcf. Today’s Estimated Production = 101.9Bcf/D. Latest Demand 7 Day Avg. = 108.64Bcf/D. Demand is expected to be low. *

***RIG COUNT ****– Next rig count comes out tomorrow after 10AM, PST. We’re down approximately 32 natural gas rigs from this time last year. Actual production has been setting records, so the actual rig count isn’t as big a driving factor for now. *

WEATHER* – Natural Gas Weather has this to say, “Weather systems will impact the West w/rain, snow, and mild to cool highs of 30s-50s. Comfortable temperatures will rule the southern and eastern US today into Friday w/highs of 50s-70s across the Midwest & Northeast besides colder 20s-30s N. Plains. The central, southern, and eastern US will cool several degrees this weekend as a weather system tracks through w/showers and highs of 40s to 60s. Overall, very light demand into Friday, then slightly stronger next weekend.” 5 – 10-day forecast = bearish. 10-15-day forecast = bearish. 3-month forecast = bearish. Summer forecast = bullish. *

STORAGE* – Anything under 80Bcf for this time of year is considered bearish. The latest guesstimate seen this morning was 39Bcf. The actual storage report shows a withdrawal of 40Bcf. We are now 280Bcf above this time last year. We are 551Bc f above the 5-year average of 1,783Bcf. At 2,334Bcf, we remain above the 5-year historical range.*

***CRUDE – ****Domestic and International crude cuts expected to continue. Crude dropped a few dollars on that news. Reduced refinery activity may also push prices at the pump up. Current price = $78.48. Forward estimates: 2024 = $75.63, 2025 = $70.76, 2026 = $67.41. *****

CA RETAIL POWER* – CAISO stays just above $35MWH.*

RENEWABLE ENERGY* – We need to stop relying on Mother Nature for our energy sources. Case in point – American rivers produced less hydropower in 2023 than any other year in the past 20 years. Washington state, the nation’s leading state for hydropower, fell by 23% in 2023. Oregon, the next biggest hydropower producer in the US, fell by 22% in 2023. We need RELIABLE renewable energy that is also cost effective. Hydro, Solar, and Wind do not meet those requirements. Solar can power a house in Arizona in July, but it cannot power a foundry or steel mill in Michigan in January.*

***CARBON OFFSETS – ***We’re going to see a lot of carbon offsets coming out of Africa as their government finally gets serious about implementing “clean cooking” mandates/projects. If you’re looking to buy carbon offsets, our menu of carbon offsets continues to grow as we add more and more supply partners. Most companies will be mandated to curb their carbon footprint. SOME carbon offsets may be the easiest, cheapest, and most effective way to do so.

***THE BOTTOM LINE – ****It’s shoulder season. We should see our best opportunities for balance of 2024 and 12 – 18-month strips over the next few weeks. *

**Indicative Fixed Prices out of April ’24 **

PG&E CG SOCAL CG SoCal Border (+ $0.51 BTS)

1 MONTH $3.20 $3.50 $3.11

3 MONTHS $3.25 $3.70 $3.32

6 MONTHS $3.72 $4.58 $4.27

12 MONTHS $4.73 $5.56 $5.23

24 MONTHS $5.09 $5.85 $5.56

Summer Strip (April ’24 – Aug ‘24)

$3.59 $4.42 $3.98

Winter Strip (Nov ’24 – Feb ’25)

$6.42 $7.47 $7.06