Energy Market Update

April 2020

Edge Insights energy experts are constantly monitoring energy market conditions in order to help ensure the best possible pricing and contract terms for our clients.  The following report is a snap shot of current conditions intended to help our clients stay informed of market dynamics.

Market Overview:

As we approach the end of heating season, the reduction of natural gas demand follows, and as usual we see stable low natural gas prices. 

The real news is the economic slowdown from the Covid-19 pandemic and the extreme effect on the oil and LNG (Liquefied Natural Gas) markets.  We have seen huge declines in commercial energy usage and significant declines in gasoline consumption.   In addition to the Pandemic, we are in the middle of an oil price war with Saudi Arabia and Russia flooding the market  The result is sharply reduced prices and refinery production cutbacks.  It’s a bit ironic… we now have low gasoline prices at the pump, and travel restrictions.  Product storage is reaching capacity in many places in the U.S.

For LNG; we are now seeing the going rate at $1.33/MMBtu which is 65% below last year.  Global competition has pressured prices down over the past year.  LNG exports have continued to decrease week over week.

The chart below shows the natural gas market.  As prices remain low on the 12 month strip price, future years are moving up.  This indicates that investors may be looking out past the pandemic for market returns.

This next chart shows the 12 month average wholesale electric pricing on PJM Western Hub.  The correlation of natural gas to electric prices is clearly demonstrated here.

 April’s gas index price settled on March 27th at $1.643/Dth, down 18.6¢ from last month.

Natural Gas Storage Update: 

The storage report for week ending Mar 27th shows a withdrawal of 19 Billion Cubic Feet (Bcf), average for this time of year.  This puts levels at 17.2% above the 5-year average by 292 Bcf, and now 863 Bcf above last year at this time.  Current percentage of total capacity is at 45.4%. 

Energy news:

From the chart above, the EIA’s Short Term Energy Outlook shows a forecast for WTI Crude Oil prices to recover throughout 2020 and 2021.

Market Opportunity:


The market buying opportunity for both gas and electric is excellent.  The NYMEX market is still near 2016’s low, and a great time to consider long terms contracts for both gas and electric.

The market opportunity is a ranking of how we perceive timing of contract  purchases for natural gas or electric.

Information provided by the Energy Division of Edge Insights, Inc.

Note:  Reducing your kW demand is good for the planet and good for your bottom line.  Just knowing how much you consume and what your equipment uses, is an important first step.  For example; reducing your kW load on peak demand days will not only help the electric generators, but can save money on you electric bills. 

Benchmarking electric and gas consumption will let you quantify your energy efficiency efforts.  Talk to your Edge Insights account representative to learn how you can start a ‘Green Initiative’ program for your business.

March 2020

Edge Insights energy experts are constantly monitoring energy market conditions in order to help ensure the best possible pricing and contract terms for our clients.  The following report is a snap shot of current conditions intended to help our clients stay informed of market dynamics.

Market Overview:

The majority of the country has experienced an above normal temperature winter.  This has had a profound effect on gas and electric prices, and forecasts are for more of the same.  Historically, low prices are not sustainable, and the potential for the market to react quickly to demand changes can occur.  Also, with low gas prices, there is a higher use of gas versus coal for electric generation.  

Liquefied Natural Gas (LNG) exports were on the rise for the past few years, but have recently flattened due to competition from other countries.  Asian countries are experiencing reduced demand due to impacts on their economy from the Coronavirus.  LNG prices are now 52% below last year, following natural gas prices, and producers are struggling to cover costs.  Drilling activity in gas producing regions show a decline in the rig count from 144 in April 2019 to 96 this past January.

For now, high gas storage levels and a warm spring will suppress market prices and expose good retail buying opportunities for long term energy contracts.

The chart below shows the natural gas market.  The influence of the temperatures and above average gas storage levels are apparent.  Note how 2023 – 2025 are starting to show the retail sentiment for extended terms.

This chart shows the 12 month average wholesale electric pricing on PJM Western Hub.

 February’s gas index price settled on February 26th at $1.829/Dth, down 4.8¢ from last month.

Natural Gas Storage Update: 

The storage report for week ending Feb 28th shows a withdrawal of 109 Billion Cubic Feet (Bcf), average for this time of year.  This puts levels at 9.2% above the 5-year average by 176 Bcf, and now 680 Bcf above last year at this time.  Current percentage of total capacity is at 47.8%. 

Energy news:

The EIA posted the following map showing the planned utility scale generation slated for completion in 2020.  Analysts are forecasting that renewables would be the primary source of energy to offset new demands through 2050. 

Market Opportunity:

The market buying opportunity for both gas and electric is excellent.  The NYMEX market is near 2016’s low, and a great time to consider long terms contracts for both gas and electric.

The market opportunity is a ranking of how we perceive timing of contract  purchases for natural gas or electric.

Information provided by the Energy Division of Edge Insights, Inc.

Note:  Reducing your kW demand is good for the planet and good for your bottom line.  Just knowing how much you consume and what your equipment uses, is an important first step.  For example; reducing your kW load on peak demand days will not only help the electric generators, but can save money on you electric bills. 

Benchmarking electric and gas consumption will let you quantify your energy efficiency efforts.  Talk to your Edge Insights account representative to learn how you can start a ‘Green Initiative’ program for your business.

February 2020

Edge Insights energy experts are constantly monitoring energy market conditions in order to help ensure the best possible pricing and contract terms for our clients.  The following report is a snap shot of current conditions intended to help our clients stay informed of market dynamics.

Market Overview:

A continuation of above normal temperatures across the country has held natural gas and electric prices down.  Currently we see high demand for electric generation and Mexico exports, while LNG is experiencing a glut situation from a global oversupply.  Additionally, the economic impact from the coronavirus is slowing receipt of LNG to Asian markets. 

Natural gas is now trading below $2 on the NYMEX.  With low prices, well drilling activity will continue to decline, as we have seen over the past few months.  It is possible that these fundamentals will offer some support for prices later this year and into 2021, especially if colder than normal forecasts for next winter develop.  Of course, we’re all watching for the outcome of the election too.

The chart below shows the natural gas market.  The influence of above average gas storage levels are apparent.

This chart shows the 12 month average wholesale electric pricing on PJM Western Hub.

 February’s gas index price settled on January 29th at $1.877/Dth, down 28.1¢ from last month.

Natural Gas Storage Update: 

The storage report for week ending Jan 31st shows a withdrawal of 137 Billion Cubic Feet (Bcf), average for this time of year.  This puts levels at 8.3% above the 5-year average by 199 Bcf, and now 615 Bcf above last year at this time.  Current percentage of total capacity is at 59.7%. 

Energy news: UGI Utility Files for Proposed Rate Changes

UGI Utility, this past October, combined their territories on to one tariff, in conjunction with a price increase they requested in January of 2019.  These increases are critical to offset costs to maintain the safety and repair of aging gas utility delivery infrastructure.  

This latest proposed increase is for $74.6 million per year, which if the PUC agrees, will increase the delivery costs for residential customers by about 10%.  UGI is requesting a release date of 3/28/2020, but to allow time for the PUC to properly digest the request, schedule public hearings, run the calculations, etc… it may take about 6 months to reach a final decision.  Also, the PUC may not approve the full amount UGI is seeking.  We have seen these Rate Change filings being requested every year for the past 4 years, with this year being the largest. 

Market Opportunity:

The market buying opportunity for both gas and electric remains good.  The reason it’s not excellent is due to high Basis pipeline costs for gas.  This is causing the gas costs for most rate classes to be high, while the NYMEX market is at near historic lows.

The market opportunity is a ranking of how we perceive timing of contract  purchases for natural gas or electric.

Information provided by the Energy Division of Edge Insights, Inc.

Note:  Reducing your kW demand is good for the planet and good for your bottom line.  Just knowing how much you consume and what your equipment uses, is an important first step.  For example; reducing your kW load on peak demand days will not only help the electric generators, but can save money on you electric bills. 

Benchmarking electric and gas consumption will let you quantify your energy efficiency efforts.  Talk to your Edge Insights account representative to learn how you can start a ‘Green Initiative’ program for your business.

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