Energy Market

Energy Markets Stock Chart

Top Stories

Key Market Insights

Brent gained $1.64/bbl yesterday settling at $65.67/bbl and WTI was up by 34 cents to $61.68/bbl.

OPEC Secretary-General Mohammad Barkindo said on Monday the organisation registered 133% compliance with agreed output reduction targets in January. Barkindo said compliance last year stood at 107%. Global oil demand for 2018 is estimated to grow 1.6 million bpd due to an “encouraging environment”, Barkindo added. While most of OPEC, especially its de-facto leader Saudi Arabia, is showing strong support for the production restraint, non-OPEC producer Russia has shown signs it may at some stage gradually start to increase output again. However soaring US production is threatening to erode OPEC’s efforts. Last week, the amount of US oil rigs drilling for new production rose for a fourth straight week to 798, in an indication that US crude output, already at a record 10.27 million bpd, may rise further. The country late last year became the world’s second biggest oil producers, only slightly behind Russia and ahead of top exporter Saudi Arabia.

Electricity Price Trends

Price Trends At Key Trading Points ($/MWH)

price trends

February power in the East continues to disappoint as the absence of weather combined with a generally healthy fleet is producing prices in the mid to high 20s for the remainder of the month. Henry Hub is up slightly through the balance of 2018 which combined with strong natural gas basis in the East has led to a slight rally in power. On-Peak PJM West hub for March is trading $34.00 this morning which is up $1.35 from Friday’s close. Term market activity has been fairly muted in power but NYMEX Henry Hub gas has traded lower in the Cal19-21 period leading to some consumer buying in that tenor.

12 month strip price

strip price

Power prices last week averaged above the prior week with SP15 clearing $34.48 (up $7.76) while Mid-C cleared $19.31 representing an increase of $4.93 on the week. Term markets were fairly stable while fuels got cheaper leading to heat rates expanding for most of the curve. The water year is sitting at a very healthy 111% at The Dalles.

Other News

Unseasonably mild weather pushed power demand to lows more typical of mid-April resulting in some of the lowest prices experienced in a while. Power flows in and out of Southern’ s control area was quite diminished with PJM and MISO interface prices roughly flat to Southern. Outage season is beginning in the region with a few large baseload plants coming offline but this did little to support prices. Outage season is expected to be slightly above average when compared to normal with some assets coming out of service sooner given the weak demand. As we get into outage season, load will become less a determinant in price versus line outages and generation outages that will drive the marginal price of many systems. Forward liquidity wise, we saw more forward off peak trades this past week. Select bullets in 2018 along with balance of 2018 trading in addition to some calendar 2019 trades.

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 February 2018. 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.