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Tuesday Apr 28, 2020   
Crude prices continue to be under pressure thanks to the ongoing quarantine efforts and the mounting tanker inventory on the world's oceans. It is assumed that the lower 48 crude storage inventory will be full, including the Strategic Petroleum Reserve some time prior to this summer. The SPR resides along the US Gulf Coast. Most of the caverns are salt formations that have been created for the purpose of holding the crude oil as an emergency stockpile. There are a number of caverns in the region that are also dedicated to holding natural gas inventory. The EIA reports this storage every Thursday morning. In the past three reports the NG salt storage stocks have climbed by 45 BCF taking the total amount to 301 BCF. With injections continuing at that current pace it is very feasible to have ... » read more
Monday Apr 27, 2020   
While driving to our office yesterday morning, something caught my eye that put the current status of our economy into perspective.  As I was pulling through the intersection of Clinton Street and 26th Avenue, the storefront diner that once was a vibrant breakfast spot in Portland, OR was not only empty from the stay-in-place mandate but it was bare as the tables and chairs were gone and all that could be seen was a stack of cardboard boxes sitting in the corner.  The owners of the business went as far as taking the company's name off the glass windows indicating that the show was over for good. Figure 1 | Off the Waffle - Closed This is just another indication of how the world is changing 'not before our eyes' as we are still actively adhering to the stay-in-place mandates by ... » read more
Friday Apr 24, 2020   
The old saying of April showers brings May flowers hits close to home this year compared to others in the recent past.  The meaning behind the words are two fold with the first tied to Mother Nature and the evolution of growth as April tends to be one of the rainiest months in the calendar season.  As the April calendar days give way to the month of May, Mother Nature changes course by providing plenty of sunshine to which flowers bloom because of the water provided to them for the past 30 days.  The second meaning is the one that stands out as the world continues to dig itself out of the recent pandemic that has impacted the daily livelihood of many, it is a period of time that delivers discomfort but provides a basis for happiness and joy to return to the surface. Figure ... » read more
Thursday Apr 23, 2020   
Last week we sent out an article tied to how wind curtailments were playing out in the Southwest Power Pool (SPP) as the power profile was being impacted by the stay-in-place mandates throughout the country.  The storyline is simple as on big wind days, the exposure to curtailments increases to a point that wind generation operators are getting accustom to feathering the turbines for a period of time.  Coming to week's end, we thought it would be appropriate to take a sneak peak at how the last four days have played out on a grid that has more wind capacity to its power demand than any other region in the country. Starting with the actual wind generation, we have seen lower output across the entire day with the hour range in a pretty tight band on the 20th with the 19th and 21st ... » read more
Wednesday Apr 22, 2020   
Without actual sports in many of our lives, we have to turn to cable television to get out fix as the National Football League (NFL) is going to operate its college draft virtually with every team tapped into some sort of video conference mechanism and a board room displaying social distancing if choosing to congregate within a space with less than 10 people.  ESPN has done a great job advertising the 1997-1998 final season of the Chicago Bulls championship run as it was publically noted prior to the start it would be the final season for their head coach, Michael Jordan said he did not want to play for another coach (even though he did with the Washington Wizards) and Scottie Pippen was in the last year of his 7 year $18 million dollar contract.  Throw in the fact that Dennis ... » read more
Tuesday Apr 21, 2020   
This year has been like no other in the commodity markets. The failure of the OPEC-Russia quota agreement to the lock down effects of the coronavirus pandemic have put the foot down on crude oil prices and there is no indication that the malaise is going to stop any time soon. Yesterday's price action in the WTI crude market was one for the ages. Never before have we seen such a squeeze in the market where prices were forced to drop all the way down to minus $38. This was clearly an issue of a few contract holders not being able to acquire storage capacity for physical delivery. Without a home for the physical product at or around the Cushing storage field they were forced to sell instead of incur liquidated damages costs. The selling has not ended either. In pre market action this ... » read more
Monday Apr 20, 2020   
We are in the fourth week of the stay-in-place mandate in many parts of the West and with that has come behavioral changes such as less driving and more walking.  Working from home has now become the norm for many while businesses are left wondering when they can get back to some sort of normalcy.  As far as the weather goes, the Pacific Northwest has been experiencing what some would consider Southern California weather as the skies are full of sunshine for the most part.  The overnight lows are still pretty chilly but quickly turn into nice walking weather will little demand on the grid.  Down in Southern California, the conditions have been just the opposite on for a period of days as the Portland clouds and rain seem to be endless as everyone is couped up in their ... » read more
Friday Apr 17, 2020 Is everyone cool if I poke a little fun at Mark Z on my way to the point of this blog? Cool! As you may recall, back in 2017 Zuck took his “Year of Travel” challenge where he visited all sorts of normal people and things throughout the year. He was getting in touch with his customers. On that tour he stopped by a NextEra wind farm in southwestern Oklahoma. After that visit he posted the following on Facebook: “Oil prices are volatile, and any oil well eventually taps out, so you have to move from place to place, often working shifts a few weeks away from home at a time. By contrast wind is renewable and doesn’t run out ... » read more
Thursday Apr 16, 2020   
With the lack of sport in our lives, I thought I would bring back one of the quotes used by Jimmy Johnson who at the time was the Dallas Cowboys football coach.  It was a glorious day over 18 years ago when his team just beat the San Francisco 49ers 30-20 to win the NFC Championship on the road in Candlestick Park.  His post-game speech was one for the ages as his excitement flowed over as it was not to long before this day that his team went 1-15 and the loyal fans wanted him fired. He stood up amongst the team, all the coaches/trainers, owner and media and congratulated his players for all their hard work.  If you have ever seen Jimmy play (Arkansas) or coach, you know he is as competitive as anyone so if you watch his speech the tone is that of proudness and confidence ... » read more
Wednesday Apr 15, 2020   
Europe has been hit particularly hard by the effects of the coronavirus. Lock down mandates are expected to remain in effect for most of the summer keeping commerce and tourism depressed until a vaccine can be acquired. Just like North America, gas demand is going to suffer. Some of the hardest hit countries are Italy, France and Spain. Those three countries are also some of the largest importers of LNG volumes on the continent. The region is also coming out of a very warm winter where cavern inventories were not drawn down like previous years. As a result, European natural gas is experiencing very loose balancing conditions at a time when they have record natural gas storage inventory.  Figure 1 | European LNG Receipts and Deliveries by Country - (source EIA) Total European ... » read more
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