Weekly Industry Report: Electricity and Natural Gas

This courtesy weekly industry report is provided to you by Active Energy, Inc., I/O Active Business Services, a leading Canadian energy management and consultancy firm licensed by the Ontario Energy Board. To learn more about Active Energy, Inc. visit www.ActiveBusinessServices.com


Natural gas futures traded higher due to expected cold weather in the U.S., trading at $3.482/MMBtu for the month of February. Over the next two weeks the vast majority of the U.S will experience below average temperatures, with the north-east facing the coldest weather. Demand is expected to increase which will cause withdrawals and bring storage levels back in line with last year’s numbers. The U.S. Energy Information Administration (EIA) announced a 81 Bcf withdrawal, which is lower than the 5-year average. In other natural gas news, the U.S. (EIA) reports the total natural gas in storage currently stands at 2.53 trillion cubic feet, 11% lower than the 5-year average.


NATURAL GAS OVERVIEW


AECO same day prices were up $0.15 increasing the average to 2.07 CAD/GJ. Last year at this time, AECO same day and near month prices averaged 1.74 CAD/GJ and 1.78 CAD/GJ. The AECO same day settled at 1.53 CAD/GJ for the month of December, 2018. Dawn same day prices averaged 3.32 USD/MMBtuand were lower at 3.18 USD/MMBtu this time last year.


Natural Gas Storage

As of Friday, January 18 th, 2019 the U.S. Energy Information Administration (EIA) reported the amount of working gas in storage was 2,533 Bcf. This represents anet decrease of 81 Bcf from the previous week. Stocks were 77 Bcf lower than last year at this time and 327 Bcf lower than the 5-year average of 2,860 Bcf. 

Drilling Rigs


The Baker Hughes report indicated that for the week ending Friday, January 18th, 2019, the total U.S. rotary rig count was 1,050, down 25 from last week. Compared to last year, there are 114 more rigs drilling for oil and gas. The rotary rig count in Canada was 209, up 25 rigs from last week. There are 116 less rigs drilling for oil and gas in Canada compared to this time last year. 

Crude Oil Overview


OPEC and it’s allies recently announced oil production cuts, causing an increase in oil prices. Further decline in U.S. drilling has also caused oil prices to increase. China announced that’s its economic growth for 2018 slowed to a 28 year low, but had minimal effects on oil prices. Crude oil futures, increased by 0.12 USD for the month of January to trade at 54.31 USD a barrel on the New York Mercantile Exchange while Brent oil futures increased by 0.32 USD to trade at 63.02 USD a barrel on London’s ICE Futures.

NYMEX: February gas contract prices increased due to expected cold weather throughout the U.S.

ELECTRICITY IN ONTARIO

The Hourly Ontario Energy Price weekly average was 23.65 CAD/MWh. The weighted average based on Ontario demand since January 1st, 2019 is 19.94 CAD/MWh.

Weather Watch In North America

The National Weather Service’s 6 to 10 day outlook shows well below normal temperatures throughout the east coast. Above normal temperatures throughout the west coast and normal temperatures in the central states are projected. Wet conditions are expected on the east coast with dryer than normal conditions throughout the west coast. On the map, temperatures and precipitation fall into three possible categories: below (B), normal (N), or above (A).



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