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Friday Nov 30, 2018   
Natural gas is the most volatile commodity which trades in a deep liquid market. Periods of calm are punctuated with occasional explosive price increases, usually with memorable names – “the polar vortex” or “the bomb cyclone” are two of the more recent stand outs. These events lead to sudden, massive increases in the short-term prices as fortunes are made (or lost). The 2018-2019 natural gas withdrawal season has already earned its place on that list. As always the fundamentals led the way: we began the heating season with inventories at approximately 3.2 TCF, the lowest level in over 10 years (beginning of November inventories have ranged from 3.7 to 4.0 TCF in recent years). Further, weather forecasts showed a cold start to heating season. Indeed, through ... » read more
Thursday Nov 29, 2018   
It’s finally time that winter jackets begin to get their seasonal position on the coat rack. The cold front that blew into New England over Thanksgiving weekend caused temperatures to drop into the teens affecting both power and gas prices throughout the region as Algonquin Citygate's settles climbed into double digits. With everyone making sure their furnace was running full blast, residential demand for natural gas tightened up the pipeline network. Let’s first take a look at the major factor affecting the AGT gas price: temperatures. Figure 1 shows temperatures in Boston compared to the AGT gas price. As temperatures cooled down and heating demand increased we can see that the gas price naturally rose. However, at the 40 degree level prices began to increase significantly ... » read more
Wednesday Nov 28, 2018   
As November comes to an end, there is a lot going on in the market as the Winter 2018-19 season is in full swing.  Everyone has been watching the weather forecasts to determine if the colder start to the season is going to continue or will Mother Nature revert back to above normal temperatures across the Midwest and Eastern portion of the Lower 48.  When it comes to the South Central, the factors are endless as we have seen production constraints in West Texas due to limitation on specific pipelines, freeze-offs earlier in the month and now some warmer weather and an abundant amount of gas in the Permian and Waha gas hub sectors.  Both hubs have traded down since the Thanksgiving weekend, where each have seen negative trades in the cash market.  This has ... » read more
Tuesday Nov 27, 2018   
Outages tied to upgrades on the Nova Gas Transmission system have been the dominate theme for the past two years in Canada, specifically Alberta.  Such events have bound the system causing restricted access to export hubs, storage facilities and load centers. The eventual outcome from all this upgrade work is to position Alberta as a dominant provider of natural gas production volumes for North America allowing them to compete with both the Marcellus and Permian basins for the premium gas markets in the Midwest and Northeast. Early last week Nova Gas Transmission released their anticipated operations outlook for calendar 2019. Included were cuts to the East Gate transport availability which will keep total flows out of Empress and McNeill at current levels through the end of ... » read more
Monday Nov 26, 2018   
As we all sit down in the work chair after the long Thanksgiving holiday period, the month of December is upon on at week's end. This is a good time to reflect on what we have seen throughout the first month of the 2018-19 Winter strip.  The first thing that comes to the forefront of the conversation is the fact that the month of November has been one of the coldest to start a winter season in some time.  It all started earlier in the month when the first Arctic blast moved down from Canada he first week of the month.  This cold front extended down into Texas as the likes of Dallas, Austin and Houston were all 10-14 degrees below normal.  In the Ohio Valley and Northeast, the chill was felt from Columbus to Boston.  All this shifted the overall Rescom heating ... » read more
Wednesday Nov 21, 2018   
Growing up in the Midwest and spending my college days in Minneapolis, Prince was the artist that the city called its own.  His downtown building called First Avenue always had a line out the door on the weekends and on multiple times the people inside got a guest appearance by the man himself as he got on stage and sang songs from his platinum albums over the years.  The two that come to mind are Purple Rain and Party Like It's 1999... Figure 1 | Prince - Party Like It's 1999   The lyrics start out with "I was dreamin when I wrote this, forgive me if it goes astray...." (yes for those of you who know the words and are singing it in your mind right now, kuddos to you).  The chorus goes like this "they say two thousand zero zero party over, oops out of ... » read more
Tuesday Nov 20, 2018   
...Here we go 'round again.... Seven months ago a cold spring took the year on year storage deficit to .8 TCF which at the time was one of the largest deficits to start a refill season. But there were no worries as the production story had a grip on the market as the numbers were soaring up to 80 BCF/d which was a year on year gain of 8 BCF. Our EGPS Supply/Demand balance sheet forecast had a solid recovery of inventory to start the winter heating season based on normal summer cooling load. The end of October was expected to see 3.6 TCF in the caverns. That just did not play out. The summer posted a record CDD accumulation led by the middle third of the continent. By the end of October the inventory was only able to close the deficit to .58 TCF. Figure 1 | Lower 48 Natural Gas ... » read more
Monday Nov 19, 2018   
It seems like so long ago that the Enbridge 36 inch pipeline in Shelley, British Columbia saw a big ball of fire shoot into the air as the pipe itself burst.  Since that afternoon day on October 8th, 2018, many people have been speculating on the cause as well as focusing on getting the line back into service as it is the main artery to serve load in the Vancouver, BC area as well as inject enough gas into the Seattle/Tacoma/Portland area at Sumas.  The former is still unknown to many as they have taken the charred pieces of pipe that have been recovered back to the lab to see what they can learn from any of the evidence while the latter quickly saw the 30 inch pipe that runs parallel to the one that exploded back in service.  This allowed for just under .700 BCF/d to flow ... » read more
Friday Nov 16, 2018   
The California Air Resources Board (CARB) released its emissions report in early November for Compliance Year 2017. The news on the carbon emissions front is mostly good, although a bit mixed. The electricity industry is crushing it in terms of emissions reductions with year-on-year reductions of more than 10% for the sector. Natural gas (excluding power generation) and transportation fuels (extraction, refining, and tailpipe) are up slightly. Californians still love to drive and, apparently, the fuel efficiency for the fleet doesn’t change much from year to year. Figure 1 from the CARB report (see link below) shows emission trends by sector over time. Figure 1 | 2011 to 2017 Total Emissions by Source Category EnergyGPS has worked a lot with this data over the years. The cap for ... » read more
Thursday Nov 15, 2018   
If you were up at 3:30 am PST yesterday and lived in the Pacific Northwest, a couple of items definitely woke you up. The first being the temperatures inside the house as the thermometer usually shows a number in the 68-69 degree level for this time of year.  When I looked at it yesterday when I was getting ready to let my dog out for his morning duties, it read 64 degrees which is a level I see on the coldest days in the winter.  In fact, when I let the dog out the door was open and you feel the chill come into the house to where the thermostat dropped another degree.  You know it is cold when the dog only takes a few seconds and comes dashing back into the friendly confines of the 63 degree interior of the home.  Man it was cold!!! Figure 1 | Average High/Low ... » read more
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