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Key Market Insights

Brent gained 92 cents on Friday settling at $57.17/bbl and WTI was up 85 cents to $51.45/bbl.

Prices are being pushed up by worries over renewed US sanctions against Iran. US President Donald Trump last Friday refused to certify that Tehran is complying with the accord even though international inspectors say it is. Under US law, the president must certify every 90 days that Iran is complying with the deal. Congress will now have 60 days to decide whether to reimpose economic sanctions on Tehran. There were also concerns on the stability of Iraq, the second biggest OPEC oil producer. Iraqi forces on Sunday began moving towards oil fields and an important air base held by Kurdish forces near the oil-rich city of Kirkuk, Iraqi and Kurdish officials said. Drillers cut five oil rigs last week, bringing the total count up to 743, the lowest since early June, according to Baker Hughes.

Electricity Price Trends

Price Trends At Key Trading Points ($/MWH)

price trends

Vista Energy announced last week they planned to close two coal-fired power plants in ERCOT totally 2300 MWs as early as the first half of 2018. Summer 2019 heat rates at north hub have rallied from 19.5 in mid-September to close at 25.25 on Friday. The announcement last week moved the summer 2019 market up roughly 150 ticks as the market seeks to digest the retirement news.

12 month strip price

strip price

In West Power, neither SP15 nor Mid-C cash changed much from the previous week with SP averaging $35.65 up $1.12 and Mid-C averaged $26.25, up $1.90. PV #1 entered a refueling outage that should last about a month as well as a large coal unit in the PACNW. On top of the unit outages, the DC line was taken out of service as it usually is this time of year. Term markets were generally well supported regardless of the volatility in fuels.

Natural Gas Price Trends

Northeast spot natural gas prices ($/MMBTU)

Natural gas spot

From Tuesday onwards last week, the prompt month natural gas contract for Nov17 settled up every day and traded in a range of over twenty cents. Last Monday’s low was $2.826, and the following Friday saw the week’s high of $3.034. The natural gas market was mostly pushed around on the possibility of colder than normal weather coming into the forecast over the next couple weeks. It has been noteworthy to watch West Pacific Tropical Storm Lan develop in southeast Asia, since one of its forecasted tracks has it getting into the North Pacific and Alaska area, which would then push cooler air down into the continental United States. As of ~8 hours ago Lan, was located a couple thousand kilometers southeast of Taiwan’s southernmost tip. Currently Nov18 is trading down 7 cents from Friday’s close, as a result of uncertainty in the cooler weather actually materializing and warmer weather predicted in the near term.

NYMEX HH 5-year futures

Natural gas spot

 

All information is pulled from Macquarie and Crius internal databases as of October 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.