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In This Issue

Natural Gas-Fired Electricity Generation So Far This Summer is Below Last Year’s Level

PJM to Spend $417m on Electric Transmission Projects Across U.S.

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

Natural Gas-Fired Electricity Generation So Far This Summer is Below Last Year’s Level

Penn Energy | July 27, 2017

The amount of natural gas used for electricity generation, also known as power burn, reached its highest daily level so far in 2017 during the past week, exceeding 41 billion cubic feet (Bcf) on July 20, according to data from PointLogic Energy. Natural gas-fired electricity generation typically peaks at the end of July or the beginning of August because of high demand for air conditioning during that period. Power burn reached a record daily high on August 11, 2016, surpassing 42 Bcf.

Power burn from April 1 through July 25 averaged 27.1 Bcf/d, or 7% lower than last year’s consumption over the same period. Although power burn in 2017 is lower than in 2016, it is still relatively high compared with the previous five-year average for that period.

Higher natural gas prices relative to last summer explain part of the decrease. The Henry Hub natural gas spot price averaged $2.27 per million British thermal units (MMBtu) from April 1, 2016, through July 25, 2016, compared with $3.03/MMBtu during the same period in 2017. Average natural gas prices at power plants were $1.02/MMBtu higher in the first half of 2017 compared with the first half of 2016, while coal prices were about the same in the first half of both years.

Coal and natural gas generated 30% and 34% of U.S. electricity in 2016, respectively—the first year that natural gas-fired electricity generation exceeded coal-fired generation. EIA’s most recent Electric Power Monthly data show that coal provided 30% of utility-scale U.S. electricity generation over the first four months of 2017, while natural gas provided 28%. EIA’s most recent Short-Term Energy Outlook expects that for 2017 as a whole, natural gas and coal will each generate 31% of the electricity in the United States.

For 2017 as a whole, EIA forecasts that power burn will average 25.9 Bcf/d, 2.5 Bcf/d (9%) lower than in 2016. Overall electricity generation is expected to be slightly lower than the 2016 level, and natural gas’s share declines because of larger shares from renewable sources (particularly hydropower) and coal-fired generation.

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PJM to Spend $417m on Electric Transmission Projects Across U.S.

Energy Business Review | July 27, 2017

PJM Interconnection said that its board has approved an investment of more than $417m to carry out electric transmission projects across select states.

The projects are all aimed at improving reliability in electric transmission in the respective areas they would serve.

As per the American regional transmission firm, the largest of the projects is the replacement of a massive, outdated substation in Newark, New Jersey. The substation serves healthcare buildings, government, transportation centers, education and other critical infrastructure customers.

A new substation named as The Public Service Electric & Gas Newark and built at an estimated cost of $275m will be the replacement of the aging equipment, stated PJM.

The electric transmission firm said that building a new substation near the existing structure was found to be the best cost-efficient solution.

PJM added that it also thought of relocating the substation but determined that it would turn out to be a more costly solution and at the same time had more risks attached to it.

Its board had also cleared equipment upgrades and improvements in areas served by various utilities in different states with most of the individual projects to be developed under $5m.

PJM president and CEO Andrew L. Ott said: “The board's approval of these projects reinforces both PJM's fundamental mission of preserving reliability and the value of PJM's independent assessment of transmission needs.

“Planning is evolving in PJM to consider impacts of new trends. However, studying and planning for reliability remains the top priority.”

The utilities associated with the approved projects include Dominion, American Electric Power, PECO Energy, Dayton Power & Light, and Pennsylvania Electric among others.

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Natural Gas and Oil Market Update


Natural Gas Price Rise Slightly on Small Inventory Build

24/7 Wall St | July 27, 2017

The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 17 billion cubic feet for the week ending July 21. Analysts surveyed by S&P Global Platts were expecting a storage injection of between 17 billion and 27 billion cubic feet. The five-year average for the week is an injection of 47 billion cubic feet, and last year’s storage injection for the week totaled 20 billion cubic feet. Natural gas inventories rose by 28 billion cubic feet in the week ending July 14.


Oil Notches Another 2-Month High, Heading For A 7% Weekly Gain

MarketWatch | July 27, 2017

Oil prices notched another two-month high on Thursday, as support from four weeks of falling U.S. crude supplies contributed to a fourth-consecutive session of gains.

September West Texas Intermediate crude CLU7, +0.12% rose 29 cents, or 0.6%, to settle at $49.04 a barrel on the New York Mercantile Exchange. Prices have now climbed for four sessions in a row and they finished at their highest level since May 30, according to FactSet data. September Brent crude LCOU7, +0.04% on London’s ICE Futures exchange added 52 cents, or 1%, to $51.49 a barrel.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 2,990 Bcf as of Friday, July 21, 2017, according to EIA estimates. This represents a net increase of 17 Bcf from the previous week. Stocks were 302 Bcf less than last year at this time and 111 Bcf above the five-year average of 2,879 Bcf. At 2,990 Bcf, total working gas is within 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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