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Frigid U.S. Weather Means Highest Power Prices Since ’08: Energy

Wind Power Provided 30% Of All New Electricity Generation Capacity In Past 5 Years

Natural Gas and Oil Market Update

EIA - Weekly Natural Gas Storage Report

NYMEX Natural Gas Week-to-Week Price Change

Natural Gas Futures - Five Year Price


NOAA 6 to 10 Day Outlook
Color indicates the probability of forecasted temperatures being above or below a historical average for the period.


Frigid U.S. Weather Means Highest Power Prices Since ’08: Energy

Bloomberg | March 6, 2014

Freezing temperatures gripping the eastern U.S. will result in the highest electricity prices in six years for consumers in Boston, Dallas and San Francisco.

Supplies of natural gas and coal will decline to six-year lows by the end of this month, government data show. The fuels are used to generate 67 percent of the country’s electricity. Wholesale power for use from April through June in New England traded at an average of $62.15 a megawatt-hour yesterday, 26 percent more than a year earlier and the highest for the period since 2008, according to IntercontinentalExchange and broker data compiled by Bloomberg.

The coldest start to a year since 2011 means consumers won’t see the normal seasonal drop in power prices. Natural gas is up 32 percent compared with a year ago, adding to costs for home heating and power generation. Maintenance planned for a third of U.S. nuclear reactors in the next three months, the most for the season in at least 14 years, will further boost reliance on fossil fuels.

“The power markets that got hammered in the first quarter, given the low supply environment, aren’t going to see much relief in the second quarter,” said Eric Bickel, a natural gas analyst at Schneider Electric in Louisville, Kentucky.

Power at Northern California’s NP15 hub and at hubs serving Dallas and Central Texas were also at the highest since 2008, while April to June prices for PJM Interconnection LLC, the 13-state grid stretching from Washington to Chicago, are the highest since 2011.

Wholesale electricity futures for consumption this spring are trading at six-year highs in Boston and San Francisco.

Energy Bills

“Consumers should anticipate higher energy bills,” said Teri Viswanath, the director of commodities strategy at BNP Paribas SA in New York.

California wholesale prices also jumped as a record drought reduced production from hydroelectric plants, which account for 15 percent of the state’s power supply.

Nationwide, consumers may pay an average of 12.28 cents per kilowatt hour from March to May, 2.5 percent more than a year earlier, according to U.S. Energy Information Administration data. Prices will be highest in New England.

Surging demand during the cold weather sent gas inventories in the lower 48 states to 1.348 trillion cubic feet on Feb. 21, the least for the time of year since 2004, EIA data show. Supplies may end March at 1.33 trillion, the lowest for the first quarter since 2008, the EIA said in a Feb. 11 report.

March Supplies

Goldman Sachs Group Inc. expects supplies to drop to 1 trillion cubic feet by the end of March, while Citigroup Inc. (C:US) is projecting 898 billion cubic feet. Either would be the lowest level for the end of the first quarter since 2003, according to government data.

Gas futures slid 14.4 cents to settle at $4.523 today on the New York Mercantile Exchange. Prices surged to a five-year intraday high of $6.493 on Feb. 24.

The price of power is mostly based on gas, said Kate Trischitta, the director of trading at Consolidated Edison Inc.’s wholesale energy trading unit in Valhalla, New York.

Stockpiles of coal for electricity generators will fall to 147 million short tons (133 million metric tons) by the end of this month, the least for the time of the year since 2008, according to EIA estimates.

A seasonal slackening of electricity consumption in the U.S. spring will give generators some room to “wiggle” between using gas and coal, Bickel said.


Wind Power Provided 30% Of All New Electricity Generation Capacity In Past 5 Years

Clean Technica | March 6, 2014

American wind power topped 4% of the US power grid for the first time last year and has delivered 30% of all new generating capacity for the last five years. In Iowa and South Dakota, wind power now exceeds 25% of total electricity production. In nine states, it provided more than 12%, and in 17 states, more than 5%.

Wind power generated 4.13% of all the electricity in America in 2013 as the fifth-largest electricity source in the US, according to the latest data from the Department of Energy’s Energy Information Administration (EIA). That is enough to power the equivalent of 15.5 million American homes, which is equivalent of all the residential households in Arkansas, Colorado, Georgia, Kansas, Nebraska, Nevada, and Ohio combined.

“Wind energy continues to make inroads as a major contributor to the US power mix,” said Elizabeth Salerno, Vice President of Industry Data and Analysis for the American Wind Energy Association. “The electricity generated by American wind power has more than tripled since 2008 not only due to significant growth in new wind projects but also technology innovation leading to more productive wind turbines.” All renewable energy sources now deliver nearly 13% of the nation’s electricity.

Texas, the state with the largest electricity load and the most installed wind capacity, also generated the most electricity from wind energy – over 35.9 million megawatt-hours, or enough to power 3.3 million homes. ERCOT, the main electric grid in Texas, received 9.9% of its electrical generation from wind energy during 2013 and is on track to top 10% in the coming years considering the 7,000 MW of new capacity now under construction in Texas.

The top states for installed wind capacity all set records in 2013 for the amount of electricity generated. Texas, Iowa, California, and Oklahoma each generated enough electricity to power more than 1 million American homes.

The geographic diversity and abundance of American wind installations is a reflection of the United States’ strong wind resource. In a 2010 study, the National Renewable Energy Laboratory reported over 10 million MW of wind resource in the US, enough to power the equivalent of the nation’s total electricity needs 10 times over.

The wind energy industry started 2014 with a record 12,000 MW of wind project capacity under construction and will deliver even more clean and affordable energy to our nation’s electricity generation portfolio.

Natural Gas and Oil Market Update

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Natural Gas Futures Add to Gains After EIA Data

MarketWatch | March 6, 2014

Natural Gas futures on Thursday added to earlier gains after the U.S. Energy Information Administration reported that supplies of natural gas fell 152 billion cubic feet for the week ended Feb. 28. The decline was more than market expectations as analysts surveyed by Platts forecast a decline of between 135 billion cubic feet and 139 billion cubic feet. Total stocks now stand at 1.196 trillion cubic feet, down 908 billion cubic feet from a year ago and 758 billion cubic feet below the five-year average, the government said. April natural gas was at $4.66 per million British thermal units, up 14 cents, or 3%. It was trading at $4.54 before the data.


arrow upWTI Crude Holds Above $101 on U.S. Economy

Bloomberg | March 6, 2014

West Texas Intermediate crude, which fell the most in two months yesterday, held above $101 as the government reported that fewer Americans than projected filed applications for unemployment benefits last week.

Prices were little changed after dropping as much as 0.9 percent. Jobless claims declined to the least since November, the Labor Department said. The euro strengthened to a two-month high against the dollar as European Central Bank President Mario Draghi said inflation is expected to rise gradually. Futures are down almost $4 from a five-month high of $105.22 on March 3.

WTI for April delivery dropped 17 cents to $101.28 a barrel at 11:08 a.m. on the New York Mercantile Exchange. The volume of all futures traded was about 27 percent more than the 100-day average.

Brent for April settlement was down 4 cents at $107.72 a barrel on the London-based ICE Futures Europe exchange. Volume was 27 percent above the 100-day average. The European benchmark crude was at a premium of $6.44 to WTI. The spread ended yesterday’s session at $6.31.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report


Working gas in storage was 1,196 Bcf as of Friday, February 28, 2014, according to EIA estimates. This represents a net decline of 152 Bcf from the previous week. Stocks were 908 Bcf less than last year at this time and 758 Bcf below the 5-year average of 1,954 Bcf. In the East Region, stocks were 370 Bcf below the 5-year average following net withdrawals of 82 Bcf. Stocks in the Producing Region were 273 Bcf below the 5-year average of 754 Bcf after a net withdrawal of 43 Bcf. Stocks in the West Region were 114 Bcf below the 5-year average after a net drawdown of 27 Bcf. At 1,196 Bcf, total working gas is below the 5-year historical range.

NYMEX Natural Gas Week-to-Week Price Change NYMEX Natural Gas Week-to-Week Price Change

Natural Gas Futures - Five Year Price

NYMEX Natural Gas Week-to-Week Price Change - Five Yearly Snapshot
Disclaimer: The information contained in these reports is gathered from public and/or internal sources and is presented solely for the convenience of our customers and Newsletter Subscribers. Patriot Energy Group makes no representation or warranty, express or implied as to the accuracy or completeness of the information set forth in this newsletter, and Patriot Energy shall not have any liability to any person or entity resulting from use of this information in any way.
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