Plenty of potential bulls lurking

Plenty of potential bulls lurking


THE One Minute Energy Update for 6-3-24

#NYMEXUp     #PG&EBasisDown     #SoCalBasisDown    #WeatherTurning    #CarbonOffsets    

NYMEX Pricing So Far Today - Open = $2.64, High = $2.79, Low = $2.63, Current = $2.68.  NYMEX prices are up approximately $0.10 from 1 week ago and down approximately $0.15 from 1 year ago. 

NYMEX CALENDAR YEAR ESTIMATES – 2024 = $2.88, 2025 = $3.45, 2026 = $3.83.

2024 NYMEX Monthly Average (so far this year) = $1.98.  2023 NYMEX Monthly average = $2.73.  2022 NYMEX Monthly average = $6.64.  2021 NYMEX Monthly average = $3.84. 

We are above the 50-day ($2.07), the 20-day ($2.48) and below the 9-day ($2.62) average.  

RESISTANCE – Starting @ $2.63/$2.68. 

THE PIVOT @ $2.57. 

SUPPORT - Starting @ $2.52/$2.47.

BASIS – Both PG&E CG Basis SoCal Basis prices continue to weaken.                      

The 2023 PG&E CG First of the Month Index averaged $9.83. 2024 averaging $3.51 through May ’24. 

The 2023 SoCal CG First of the Month Index averaged $10.95.  2024 averaging $3.29 through May ’24. 

The 2023 SoCal Border First of the Month Index averaged $8.14.  2024 averaging $2.65 through May ’24. 

LNG EXPORTS, NG EXPORTS, NG IMPORTS – LNG Exports = 13.0Bcf/D.  Mexico Exports = 6.9Bcf.  Canadian Imports = 5.3Bcf.

PRODUCTION/SUPPLY & DEMAND THIS WEEK – Today’s Est. Supply = 105.5Bcf.  Supply 7 Day Avg. = 106.3Bcf.  Today’s Est. Production = 100.3Bcf.  Today’s Est. Demand = 96.0Bcf.  Latest Demand 7 Day Avg. = 95.2Bcf.  This week’s demand, even with the increased temps, remains low for the week. 

RIG COUNT – The latest rig counts = still at 600.  The oil rig count falls by 1 with a total of 496 active rigs. The natural gas rig count increases by 1 for a total of 100 active rigs.  The miscellaneous rig count is unchanged at 4 active rigs.  We are down 96 active rigs compared to this time last year.

STORAGE – This week’s storage report is estimated to be an injection of 39Bcf.  We are currently 380Bcf above this time last year and 586Bcf above the 5-year average of 2,209Bcf.  At 2,795Bcf, we are above the 5-year historical range.  The latest Storage projections are 3.87Tcf by Oct ’24 and 1.73Tcf for March ’25. 

WEATHER – NatGasWeather has this to say, “Most of the US will warm above normal the next several days w/highs of upper 70s and 80s from the Midwest to the Northeast, and upper 80s and 90s over the rest of the US besides locally hotter 100s from California to Texas and cooler mid-50s-60s across the Northwest w/heavy rains. A hot upper ridge will build over the western ½ of the US late in the week, while weather systems cool the eastern ½ of the US into the 60s-80.”  But just look at those bearish mid-June forecasts.

5 – 10-day forecast = bearish.  10-15-day forecast = bearish.  3-month forecast = bullish.  Summer (July – Sep) forecast = bullish. 

***CRUDE –***Up.  Current price = $76.98.  Forward estimates: 2024 = $76.42, 2025 = $72.94, 2026 = $69.81.   

CA RETAIL POWER – CAISO pricing moves up to just over $14 per MWH. 

CARBON OFFSETS – California and other states will be mandating companies buy carbon offsets, starting as early as 2025.  Is your company ready for that mandate?  Better to get ahead of the 2025 demand – more options, greater price range.  We can help. 

THE BOTTOM LINE – Bulls are in front right now.  Give it one week and bears should be leading once again.  Good opportunities remain.  But don’t forget what summer heat, reduced production, pipe maintenance season, and an increase in natgas generated power production does to the price of both NYMEX and West region Basis. 

 

                         Indicative Fixed Prices out of July ’24                              

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

1 MONTH            $3.55          $4.00             $3.60

3 MONTHS          $3.80          $4.65             $4.15

6 MONTHS         $4.65           $5.25             $4.90

12 MONTHS        $4.90          $5.40             $4.81
24 MONTHS       $5.18          $5.90             $5.55

Summer Strip (July ’24 – Oct ‘24)

$3.80           $4.35            $3.95

Winter Strip (Nov ’24 – Feb ’25)

$5.70           $6.15          $5.70