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In This Issue

EIA: Natural gas generated almost a third of Q1 power, could hit 34% this year

Solar Added More New Capacity Than Coal, Natural Gas and Nuclear Combined

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.


Market Overviews

EIA: Natural gas generated almost a third of Q1 power, could hit 34% this year

Utility Dive | June 9, 2016

Natural gas closed out 2015 as the primary generation fuel in the United States, and new data from the EIA indicates that trend is continuing.

"Sustained low natural gas prices have led power generators to significantly expand the share of electricity produced by that fuel," EIA said. The agency expects natural gas to supply 34.4% of total generation in 2016, up from 32.7% last year. "This increase is displacing coal generation, whose share of generation is expected to fall from 33.2% last year to 29.9% in 2016."

First quarter gas generation rose from 28.6% in 2015 to more than 32% so far this year, while coal fell from 36% to about 29% during the same period. Last year, coal still generated slightly more electricity than natural gas, but that trend is expected to reverse this year. Coal plants generated 1,356,057 GWh of electricity last year, compared with gas' 1,335,068 GWh.

Looking ahead t the summer, EIA forecasts U.S. retail power sales the residential sector will decline slightly, by 0.1%.  But the agency said daily average residential sales for all of 2016 will be 1.6% below 2015 levels.
Sales of electricity to the commercial and industrial sectors are expected to grow by 0.5% and 0.2%, respectively this year.

Total generation this year will decline about 0.5% from 2015, averaging 11,140 GWh/day. EIA is forecasting an increase in natural gas prices next year, which the agency expects will reduce the fuel's generation share to 33.3% in 2017 and raise coal's share rising to 30.9%.

The retail price of electricity in the U.S. will average 13 cents/kWh this month, EIA said. New England will have the highest regional price, at 18.4 cents/kWh, versus 11 cents in the East South Central region.

EIA said the U.S. residential electricity price averaged 12.7 cents/kWh in 2015 "and is expected to stay about the same in 2016 and then rise 2.5% to an annual average of 13.0 cents/kWh in 2017."

Key Points:

  • Natural gas was the dominant generation fuel in the first quarter of 2016, continuing to push out coal plants as the two fuels have essentially swapped places in the last year. Gas generated 32.1% of the United States power in the first quarter of the year, compared with coal's 28.7%.

  • According to the U.S. Energy Information Administration's June Short Term Energy Outlook, renewable generation hit 9% in the early months of the year, up from 6.9% in the same period last year.

  • The agency is forecasting total power generation this year to average 11,140 GWh/day, a decline of 0.5% compared with 2015.

Read More:

Solar Added More New Capacity Than Coal, Natural Gas and Nuclear Combined

EcoWatch | June 9, 2016

Solar is on track for another record-shattering year. According to a new report from GTM Research and the Solar Energy Industries Association (SEIA), the U.S. solar industry will install 14.5 gigawatts of capacity in 2016, nearly doubling the 7.5 gigawatts in capacity installed in 2015.

The U.S. has now reached 29.3 gigawatts of total installed capacity, enough to power 5.7 million American homes.
Solar—a pollution-free, renewable resource—will help the country move towards the low-carbon future it needs. In fact, 2015 was the first time solar exceeded natural gas capacity additions on an annual basis.

And now, just in the first quarter of 2016, solar made up 64 percent of new electric generating capacity, which is more new capacity during this period than coal, natural gas and nuclear combined.

“This growth cements solar energy’s role as a mainstay in America’s portfolio of electricity sources,” the report noted.
California, North Carolina, Massachusetts, Nevada and New York had the top solar markets in this quarter, with overall price for all solar systems dropping 8.8 percent.

The report said that residential solar installations have increased 34 percent from the prior year. Commercial and industrial customers installations rose 36 percent. More than one million solar photovoltaic installations are now operating across the country.

“While it took us 40 years to hit 1 million U.S. solar installations, we’re expected to hit 2 million within the next two years,” said Tom Kimbis, SEIA’s interim president. “The solar industry is growing at warp speed, driven by the fact that solar is one of the lowest cost options for electricity and it’s being embraced by people who both care about the environment and want access to affordable and reliable electricity.”

As Reuters noted, the solar industry’s remarkable growth was due in part to utility companies scrambling to bring their solar projects online before the expiration of the Solar Investment Tax Credit, a 30 percent federal tax credit for both residential and commercial projects that was supposed to expire at the end of 2016. That credit, however, was extended through the end of 2019.

According to Reuters, “utilities in many markets are procuring solar as a hedge against volatile natural gas prices, the report said, pointing to the sharp drop in the price of utility-scale solar in recent years.”

GTM said in its report that the extension of the federal tax credit will spur more than 20 gigawatts of additional solar capacity by 2021. However, the utility-scale market is expected to contract next year and in 2018.

Read More:

Natural Gas and Oil Market Update


Natural Gas Futures Jump After Inventory Data

Wall Street Journal | June 9, 2016

Natural gas futures jumped Thursday after weekly U.S. data showed stored supplies rose less than expected.

The U.S. Energy Department said natural gas stockpiles rose 65 billion cubic feet in the week ended June 3, well short of the 79 billion-cubic-foot increase projected in the consensus estimate of analysts surveyed by The Wall Street Journal.

The lower-than-expected increase meant the surplus of stored gas, while large, is not as big as expected at 32.1% above average for this time of year. Still, supplies remain hefty, with nearly 3 trillion cubic feet of gas in U.S. storage.


Us Oil Ends At Fresh 2016 Highs On Nigeria Sabotage, Crude Draw

Reuters | June 9, 2016

U.S. crude futures rose for a third consecutive day on Wednesday, closing at new 2016 highs on supply outages led by the sabotage of oil facilities in Nigeria.

U.S. crude stocks fell for the third consecutive week to June 3, sliding by 3.2 million barrels versus analysts’ expectations for a 2.7 million-barrel drawdown, government data showed. But gasoline stockpiles grew by 1 million barrels and distillates, which include diesel and heating oil, rose 1.8 million barrels, versus forecasts of drawdowns.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 2,972 Bcf as of Friday, June 3, 2016, according to EIA estimates. This represents a net increase of 65 Bcf from the previous week. Stocks were 660 Bcf higher than last year at this time and 722 Bcf above the five-year average of 2,250 Bcf. At 2,972 Bcf, total working gas is above the five-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 ($ per mmBtu)

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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