Nat Gas Prices In Texas Go Negative!!!

THE One Minute Energy Update for 4-4-24

#CurrentBullRunIsWeatherDriven #Won’tLast #NatGasPricesInTexasGoNegative

***#NYMEXDown #PG&EBasisDown #SoCalGasBasisDown #Weather #CarbonOffsetsSoldHere ***

***NYMEX pricing so far today - ****Open = $1.84, High = $1.85, Low = $1.78, Current = $1.79. NYMEX prices are up approximately $0.10 from 1 week ago and down approximately $0.30 from 1 year ago. *

NYMEX CALENDAR YEAR ESTIMATES* – 2024 = $2.53, 2025 = $3.46, 2026 = $3.82.*

*2023 NYMEX Monthly average = $2.73. 2022 NYMEX Monthly average = $6.64. 2021 NYMEX Monthly average = $3.84. *

*We are below the 50-day ($1.85), but above the 20-day ($1.73) and above the 9-day ($1.74) average. *

RESISTANCE* – Starting @ $1.86/$1.93. *

THE PIVOT* @ $1.86. *

SUPPORT* - Starting @ $1.81/$1.78. *

BASIS* – Both PG&E and SoCal Basis prices are down ever so slightly today. Front months are falling hard in price. We should look at locking up the summer months before summer heat provides bullish support. *

*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. *

***LNG EXPORTS, NG EXPORTS, NG IMPORTS ****– LNG exports averaging 12.8Bcf.D. Exports to Mexico = 6.2Bcf/D. Imports from Canada = 4.5Bcf. *

PRODUCTION/SUPPLY & DEMAND* – Today’s Est. Supply = 107.3Bcf. Supply 7 Day Avg. = 106.87Bcf. Today’s Est. Production = 102.0Bcf. *

*Today’s Est. Demand = 110.0Bcf. Highest demand day of the past 7 days. Latest Demand 7 Day Avg. = 103.65Bcf. 7-day Demand forecast moves to “high”. *

***RIG COUNT ****– The total rig count is down 18% from this time 1 year ago. The next rig count comes out tomorrow. *

STORAGE* – The estimate was a 42Bcf withdrawal. The actual report shows 37Bcf withdrawal. We are now 422Bcf above this time last year and 633Bcf above the 5-year average of 1,626Bcf. At 2,259Bcf, we are above the 5-year historical range. *

WEATHER* – NatGasWeather.com has this to say for the next 6 days, “A spring storm will impact the Great Lakes & East through the weekend w/rain, snow, and lows 20s-30s, highs of 40s to 50s for strong demand. The rest of the US will be mild to nice w/highs of 50s to 80s besides the slightly cooler and showery Northwest w/highs of 40s. Much of the US will warm into the very nice 50s to 80s next week for light to very light demand. Overall, high demand days 1-4, then light to very light.”*

*5 – 10-day forecast = bearish. 10-15-day forecast = bearish. 3-month forecast = bullish. Summer (June – Aug) forecast = bullish. *

CRUDE –* Still running up! Current price = $85.11. Forward estimates: 2024 = $82.42, 2025 = $75.62, 2026 = $70.87. *****

CA RETAIL POWER* – CAISO just over $49 per MWH. Quite the jump from 1 week ago.*

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, many of our Supply Partners offer carbon offset menus (type of carbon offset, price per unit, etc.) for review and purchase.*

RENEWABLE ENERGY* – Rocky Mountain Power and its parent company, PacifiCorp, announced a change in direction for both their coal-fired power plants and renewable energy development. Originally set to close the two-remaining coal-fired power plants in 2032, the two plants will now stay in operation through 2036 and 2042. This comes after realizing renewable energy would be unable to meet power production demand.* *Regarding RE, the plan was an increase of nearly four times the company's current wind and solar resources to a total of 20,000MW by 2032, in addition to 7,400MW of energy storage by 2029. Much of that has been axed in the new plan. As we get closer to the unicorn goals, reality is setting in more and more every day. *

Fascinating article on the cost of manufacturing RE to replace oil and gas. Too many jaw dropping truths to list here. Enjoy the read, https://www.fastcompany.com/91073705/green-manufacturing-power-grid-renewable-energy;

***THE BOTTOM LINE ***– Texas NatGas prices went negative this week – producers were basically paying pipelines to take the gas. This comes from weak winter weather, record setting production/supply, and below normal demand. This won’t last forever but while it does last, the immediate months are cheap, cheaper than they have been in a long time. Maybe we look only at buying First of the Month Index gas or short term (1 – 4 months) fixed price strips. Let’s talk about this ASAP and take advantage of the current price offerings. And once this current weather blows across the country, prices could fall further. Let’s get set up with volume and terms.

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

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

1 MONTH $2.70 $2.58 $2.33

3 MONTHS $3.10 $3.45 $3.10

6 MONTHS $3.53 $4.22 $3.93

12 MONTHS $4.70 $5.35 $4.89

24 MONTHS $5.10 $5.80 $5.25

Summer Strip (April ’24 – Aug ‘24)

$3.45 $4.15 $3.65

Winter Strip (Nov ’24 – Feb ’25)

$6.40 $7.20 $6.75