Heavy selling pushes NYMEX back down

Heavy selling pushes NYMEX back down

THE One Minute Energy Update for 3-8-24

Heavy selling pushes NYMEX back down.

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

***NYMEX pricing so far today - ****Open = $1.79, High = $1.81, Low = $1.75, Current = $1.79. NYMEX prices are down approximately $0.15 from 1 week ago and down approximately $0.90 from 1 year ago. *

NYMEX CALENDAR YEAR ESTIMATES* – 2024 = $2.49, 2025 = $3.47, 2026 = $3.79.*

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 ($2.21), and above the 20-day ($1.73) and the 9-day ($1.84) average. *

RESISTANCE* – Starting @ $1.92/$2.02. *

THE PIVOT* @ $1.85.*

SUPPORT* - Starting @ $1.74/$1.67. *

BASIS* – Both PG&E and SoCal Basis prices are down today on day ahead pricing as well as some forward months. Waiting for the weather to shift back to normal. We are nearing the time when we will be executing forward strips. *

*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 ****– The milder than normal winter throughout Europe has left natural gas stockpiles plentiful coming out withdrawal season and into injection season. This mild weather has helped US prices stay bearish due to the lack of LNG export demand to Europe. *

PRODUCTION/SUPPLY & DEMAND* – As of 3-6-24 - Today’s Est. Supply = 106.8Bcf/D. Supply 7 Day Avg. = 107.8Bcf. Today’s Estimated Production = 101.6Bcf/D. Latest Demand 7 Day Avg. = 108.64Bcf/D. Demand is expected to be low. *

***RIG COUNT ****– Still waiting for the most recent rig count, due out today. 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* – Lingering storms in the Midwest with a new storm moving into the Pac NW. 5 – 10-day forecast = bearish. 10-15-day forecast = bearish. 3-month forecast = bearish. Summer forecast = bullish. *

STORAGE* – Barron’s had this to say yesterday, “Natural gas futures lose ground after the EIA reports a fifth consecutive below-average draw from underground storage, while weather forecasts point to low demand that's likely to swell inventory surpluses into the end of the heating season.*

Natural gas storage decreased by 40 Bcf last week to 2,334 Bcf, which is 31% more than the five-year average.

"It is this huge supply overhang that has halted price gains to about the $2 level in recent sessions," Ritterbusch says in a report. "With continued mild temperatures spread across most key consuming regions now stretching to the shoulder period, a further surplus expansion to as much as 700 Bcf is within the realm of possibility." 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 –* Continued cuts both here and abroad. Current price = $78.01. Forward estimates: 2024 = $76.51, 2025 = $71.33, 2026 = $67.74. *****

CA RETAIL POWER* – CAISO stays just above $36MWH.*

RENEWABLE ENERGY* – Cost is not the only issue for wind/solar energy here in the US. Growing concerns of grid connectivity and straining the grid with increased reliability to an outdated grid are coming to the forefront. *

***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 – ****“Experts” expect NYMEX to fall to the $1.70 - $1.76 next week before testing sub $1.70 price ranges. Basis should weaken by next week. Bulls for both NYMEX and Basis could return quickly with the first sign of warmer than normal temperatures, coupled with production cuts. *

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

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

1 MONTH $3.09 $3.12 $2.84

3 MONTHS $3.07 $3.27 $2.92

6 MONTHS $3.57 $4.26 $3.90

12 MONTHS $4.68 $5.38 $5.08

24 MONTHS $5.04 $5.69 $5.39

Summer Strip (April ’24 – Aug ‘24)

$3.42 $4.10 $3.75

Winter Strip (Nov ’24 – Feb ’25)

$6.44 $7.39 $6.97