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Wednesday Dec 28, 2016   
One of the most intriguing stories we have been following since the onset of "Polar Vortex 2016" has been the response from the coal stack in PJM.  As temperatures began to fall heading into this month coal burns ramped in across the ISO reaching a peak output on December 16th.  Coming out of the Christmas holiday things have settled across the power markets as temperatures return to slightly above normal across the Ohio Valley. We thought it would be a worth while exercise to look over the spike in coal generation with a little more ... » read more
Tuesday Dec 27, 2016   
Month to date, we have seen much below normal air dominate the North American climate. The already tight natural gas supply demand balance has only managed to get tighter because of the gain in weather adjusted ResCom demand. After setting an all time high this past November, the Lower 48 natural gas inventory has dropped back to the five year average. The current withdrawal pace will set a new record for the month of December. Figure 1 | EIA US Natural Gas Inventory as of 12/16/2016   The big withdrawals are more than just the ongoing story of lower year on ... » read more
Friday Dec 23, 2016   
After taking a year hiatus,  the EnergyGPS Bowling holiday party was back in the mix.  We locked in the lanes this past Monday afternoon for some team building and camaraderie as we wind down the year.  As we make the 6 block trek, the stories of years past start to be told like the time I had to strike out in the 10th frame (three strikes in a row is called a turkey) to wind by 1 point.  Or the many times individuals get two strikes in a row and on the scoreboard flashes a rock solid shirtless chest with two big X's on the biceps.  The ... » read more
Thursday Dec 22, 2016   
The recent arctic blast that pushed down from Canada and moved through the Midwest and Northeast dropped temperatures well below normal of this time of year. Figure 1 | Chicago Temperatures - Daily Actual and Forecast In fact, by the weekend, the colder weather shifted down into the South Central region as well with Houston's overnight low dropping down to the freezing level. Figure 2 | Houston Temperatures - Daily Actual and Forecast All this added up to the rescom demand within the Lower 48 shifting up to the 63 BCF level on the 19th.  On the same day ... » read more
Wednesday Dec 21, 2016   
Early this week a shot of cold weather moved through southern California which pushed up Sendouts on the SoCal gas system to in the 3.5-3.6 BCF range. This is the highest level we have seen since last winter when they were taking gas out of Aliso Canyon to fix the leak.  Over the summer, the highest Sendouts we saw were in the 3.4-3.5 BCF level (August 16th).  During that time, we saw SoCal Border basis blow out to $0.71 in the cash market (outright price of $3.41).  Figure 1 | SoCal Basis - Cash From a balancing perspective on that day, we saw gas ... » read more
Tuesday Dec 20, 2016   
Starting this past weekend, the Arctic air that was moving across the northern tier of the continent pushed southward through the Mississippi Valley wreaking havoc on the production volumes in the MidContinent and Rockies. This is a three day cold air event that started on Sunday and lasts through Tuesday. From Friday to Sunday, the freeze offs along the eastern Rockies area amounted to 1.66 BCF.  Figure 1 | Monday Weather Conditions The drop took total US production volumes down to 69.6 BCF which is only one of three episodes where the Lower 48 production ... » read more
Monday Dec 19, 2016   
With temperatures in Southern California shifting down this weekend, the operators at SoCal Gas have been on high alert as the systems sendouts jumped up to the 3.3-3.4 BCF range as heating demand picked up. Figure 1 | Burbank Temperatures As a result, several notes have been published with the latest last night stating that the grid was on 'curtailment watch' due to concerns of supply shortfalls as the rescom demand was rising and as a result there was significant reliance on storage withdrawals. Figure 2 | SoCal Gas Critical Notice - Curtailment Watch As we move ... » read more
Friday Dec 16, 2016   
I was recently discussing long term California power markets with a client. The conversation turned to the potential for negative prices. When talking to renewable developers the conversation often goes as follows: Client: “Real time prices can go negative, but you don’t expect that day ahead prices will go negative too, do you?” EnergyGPS: “Um … day ahead prices have been negative already and we expect the frequency to increase in the future.” Client: “Ok, but that will just be an anomaly, day ahead prices won’t be ... » read more
Thursday Dec 15, 2016   
Last December was such an anomaly as the temperatures were so mild across the entire continent.  This led to well below normal rescom demand in the Midwest and Eastern parts of the country to a poitn that the price of natural gas took a big nose-dive.  The big shift down in the cash market/forward curve moved the natural gas fired generation lower in the supply stack in many regions (below that of coal), including PJM. As a result, we saw more power burns via natural gas than that of coal fired generators.  Once we got into January, that changed as some ... » read more
Wednesday Dec 14, 2016   
The Midwest and East Coast are preparing themselves for a serious cold shot this weekend as the "Polar Vortex" meanders south and drops sub-freezing arctic air across the continental US. Temperatures are forecasted to decline the remainder of the week with the coldest weather expected to hit Friday. High temperatures are not expected to break 20 degrees in Boston for Friday while NYC sees a high of only 25 degrees.   Figure 1 | NOAA Northeast High Temperatures Maps – Dec 15th & Dec 16th    As is typically the case, the freezing ... » read more
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