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Natural Gas

Potential for the Warmest Winter in 62 Years

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Lack of weather related demand this winter has driven the natural gas market toward 10-year lows and allowed inventory stockpile levels to reach all-time highs. 

Data from the Energy Information Administration (EIA) through the week ending January 27 reports that natural gas storage levels are at 2,966 Bcf, about 375 Bcf higher than the previous record high of 2,571 Bcf set in 2007 during the same week.  In addition, the surplus in storage levels to last year and the five-year average continues to expand as a result of 12% lower population-weighted heating degree days (HDD) versus the 30-year average. …
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NYMEX Natural Gas Has a Volatile Week: Production Cuts & Weather Forecasts

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On Jan. 23, the NYMEX February gas contract hit a 10-year low of $2.231/mmbtu, a price last seen in March 2002.  Monday began what turned out to be a volatile week as Chesapeake Energy (CHK), the second largest gas producer, announced revisions to their 2012 outlook with an immediate cut in gas production and the possibility of further cuts.  The announcement sent the NYMEX rallying 38 cents, or as much as 17% on Monday and further gains were made throughout the week.  On Thursday, the rally stalled as weather forecasts for February continued to come in warmer than normal, returning…
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From Executive Energy Forum: “A More Competitive, Innovative and Resilient National Energy Policy”

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By James L. Connaughton
Executive Vice President, Corporate Affairs, Public and Environmental Policy, Constellation Energy

A major challenge that businesses, policy leaders, and legislators face today results from our country having to labor under an incoherent hodgepodge of outdated, disjointed, and often needlessly expensive and inefficient energy policies at the federal and state level.   

During our Executive Energy Forum in November, I was honored to sit down with Byron Dorgan (former Senator and Congressman [D. ND] and Sr. Policy Advisor of Arent Fox) and Don Nickles (former Senator [R. OK] and Chairman and CEO of The Nickles Group) to…
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Will Natural Gas Storage Reach Full Capacity?

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Underground natural gas storage is at a record level and is poised to stay that way throughout the remainder of 2012.  The glut of natural gas stems partly from the energy industry’s success with new and more efficient drilling techniques that has allowed production to skyrocket in areas known as shale formations.  While production has been increasing, demand for natural gas has not been able to keep up, forcing producers to put their natural gas into storage. 

The mild winter across the country has added to the supply/demand imbalance.  During the winter season, natural gas is withdrawn from storage to…
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Natural Gas Prices Crumble Below $3 As Mild Weather Remains In Forecast

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After holding at the psychologically important level of $3/MMBtu for several days, the natural gas prices on the Nymex finally broke down this week after forecasts for mild weather led to fears that sustained heating demand would not arrive this winter.

Prices for February delivery opened the week at $3/MMBtu but quickly declined through and are currently $2.65/MMBtu, a drop of 12% on the week and bringing prompt month prices to the lowest settlements seen since September 2009. Although some of the major weather forecasters to the energy industry have noted there will be bursts of winter weather over…
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Snowpack’s Influence On Winter Heating Demand

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Both natural gas and power prices continue to experience considerable downward pressure due to the persistent above average temperatures present in the eastern two-thirds of the country.  Weather-related demand, which is typically measured in Heating Degree Days (HDD’s), has been significantly lower than normal this winter.  

This lack of demand has delayed the price support that we typically see at this point of the heating season.  The HDD’s from Nov. 1, 2011 to the current day are -13% lower than the same period last year and are -8% lower than the 30-year normal.  As a result, the prompt-month natural gas…
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