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Weekly Energy Market Update June 2, 2014

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Below is the Direct Energy Business Weekly Energy Market Update video for June 2, 2014. We embedded this video right into the blog post, so you don’t have to leave this page to view it. The written summary is still below too.

The following is a summary of last week’s market activity and the market outlook.

  • Natural gas futures continue to be range-bound, between $4.28 and $4.80, since the end of February. The past week has seen some strength in prices, mostly in the near-term. The prompt month is up 14 cents since last week, settling at $4.54 on Friday, and the 12-month strip is up 8 cents. The calendar ‘15 strip is up 6 cents, and calendars ’16-’20 are up a penny or two.
  • Short-term weather forecasts are showing above-normal temperatures for most of the country for the next few days.
  • Days 1-5: Above-normal temperatures for most of the US, with extremely warm (+8°F above normal) temperatures expected in northern California. Normal temperatures are expected in the Southeast.
  • Days 6-10: Areas of above-normal temperatures recede to the Rockies and inland in the West, with most of the rest of the US at normal temperatures.
  • The EIA reported a slightly bearish storage injection last week, but the market did not budge. Gas stockpiles grew by 114 Bcf for the week ended May 23, 2014. This beat expectations by 4 Bcf, as well as coming in greater than last year (+99 Bcf), as well as the five-year average (+93 Bcf). Current inventory now stands at 1,380 Bcf, which is 748 Bcf (35%) below last year and 922 Bcf (40%) below the five-year average.
  • This week’s storage report for the week ended May 30 is expected to be around 115, which would beat last year’s injection for the corresponding week (+108 Bcf), as well as the five-year average (+93 Bcf). Projections for the next couple injections after this week are pared back some due to the above-normal temperatures and increased demand we’re experiencing now.
  • The U.S. EPA is expected to unveil a new plan today to cut carbon emissions nationally by 30% from 2005 levels by the year 2030. However, there is a long legislative road ahead on this issue. Stay tuned!

Posted: June 02, 2014