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Key Market Insights

Brent gained $1.20/bbl on Friday settling at $63.40/bbl and WTI was up 67 cents to $57.36/bbl.

Crude prices have gained well over a third in value from their 2017 lows, largely due to production cuts by OPEC and a group of non-OPEC producers, including Russia, which have been in place since the start of the year. OPEC-led output curbs may end earlier than scheduled if the market re-balances by June, Kuwait’s Oil Minister Issam Almarzooq said Sunday. The United Arab Emirates energy minister Suhail said on Monday that OPEC and non-OPEC oil producers plan to announce in June an exit strategy from the cuts. However, the effects of the cuts could be undermined by rising output from the US. US production is up by 15% since mid-2016, with 9.71 million bpd. US drillers boosted the rig count by two to 751 for a third weekly advance, according to Baker Hughes data on Friday.

Electricity Price Trends

Price Trends At Key Trading Points ($/MWH)

price trends

Term markets in the Eastern Interconnect were lower on the week following a combination of lower Nymex and delivered gas pricing. The Jan18-Feb18 contract at PJM West Hub settled $43.15 down roughly $3.30 on the week. The market will closely watch how the gas system performs this week with below normal temperatures blanketing much of the region. If volatility on the fuel side of the equation fails to materialize some of the risk premium in the winter contracts could be under pressure. Tetco M3 basis for Jan18 delivery sold off aggressively on the week with Friday’s settlement of $1.575 representing $0.42 decline on the week. Term markets are roughly unchanged this morning from Friday’s close in power but cash is weaker with the Dec12-15th package down roughly $4.50 to be valued $44.00 this morning ahead of this week’s cold weather.

12 month strip price

strip price

Cash markets in the West were slightly up on the week with SP15 averaging $46.49 (up $1.49) while MidC cleared $26.34 up $2.20 on the week. Wild fires continue to threaten California energy infrastructure with the Thomas fire covering 230,000 acres still just 10% contained. Customers thus far in Southern California have lost power intermittently but no damage to transmission lines has been reported. Jan18 SP15 contract rallied on the week buoyed by the December cash markets with Jan18 settling $41.10 up ~ $3.00 on the week. Longer term markets were relatively unchanged as the entire market focuses on both the gas constraints and wild fires in the region.

Natural Gas Price Trends

Northeast spot natural gas prices ($/MMBTU)

Natural gas spot

NYMEX HH 5-year futures

Natural gas spot


All information is pulled from Macquarie and Crius internal databases as of December 2017. All materials published on this document are based on real-time and/or historical data, and are for informational purposes only. Crius Energy makes no representations or warranties, express or implied, as to the quality, accuracy, completeness, or reliability of the information provided here. Crius Energy accepts no responsibility for any loss, damage, costs or expense (whether direct or indirect) incurred as a result of any error, omission or misrepresentation of any information on this page. This content includes predictions, estimates, or other information that might be considered forward-looking. Any forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements.