CA Basis Weakening

CA Basis Weakening


The One Minute Energy Update - May 13, 2024

📈 Market Movements:

  • NYMEX Natural Gas is showing a positive trend with prices starting at $2.25 and peaking at $2.30 today. Compared to last week, prices have increased by $0.10 but are down $0.20 from last year.
  • 2024 Estimates: Projected prices are $2.69, rising to $3.84 by 2026.

📉 Basis Points:

  • PG&E CG Basis and SoCal Basis are down, reflecting lesser congestion charge differentials.

🌡️ Weather Impact:

  • Cooler forecasts are weakening demand, with the northern US experiencing comfortable temperatures and the southern regions heating up.

🔥 Energy Demand & Supply:

  • Estimated daily supply stands at 103.9Bcf.
  • Demand is lighter, expected to remain stable around 95.2Bcf for the week.
  • Production today is at 99.0Bcf, indicating potential bullish trends later this year due to a drop in production.

🛢️ Oil and Gas Rigs:

  • Oil rigs have decreased by 3 units, totaling 496, while natural gas rigs increased by 1, totaling 103.

🔄 Storage Insights:

  • Current storage levels are significantly above last year and the five-year average, suggesting robust supply.

⚡ Power and Carbon Markets:

  • CAISO power prices are currently just over $16 per MWh.
  • Carbon Offsets are available from $1 to $375 per unit, offering a variety of options for managing carbon footprints.

📊 Forward Looking Statements:

  • Weather predictions and market dynamics suggest fluctuating conditions but generally bullish trends for the summer.

🔍 Key Indicators:

  • Resistance: Begins at $2.31, with a pivot at $2.27 and support starting at $2.21.
  • Long-Term Forecasts: Prices for the coming months and year show a gradual increase, with significant gains expected in longer-term contracts.

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