Archives – March, 2012

Market Update 3-26-12

Heating Oil

Heating oil was down approximately 3.34% during the week ending 3/23. The opening price on Monday 3/19 was $3.298 a gallon and closed on Friday 3/23 at $3.188 a gallon. Disappointing industrial production figures out of China, Germany and France on Thursday 3/22 suggested economic growth in Asia and Europe may slow more than previously expected. However, the U.S. reported the number of people seeking unemployment benefits fell to a four-year low last week, reinforcing recent data that suggests the world’s biggest economy is improving. Crude has hovered between $105 and $110 for the last month, up from $75 in October, amid worries that a military strike by Israel or the U.S. on Iran’s nuclear facilities could disrupt global supplies.

Natural Gas

Natural-gas futures settled fractionally higher Friday 3/23, but were 2.2% lower on the week and near 10-year lows. For weeks, rising output has coincided with dropping demand as above-normal temperatures were registered across most of the country, thus feeding a supply glut. Gas companies were putting gas into storage last week, rather than drawing it out to meet demand. That’s the earliest in the year this has happened in five years. The Energy Information Administration data showed inventories ending winter at a record high for this time of year of 2.38 trillion cubic feet, or 54% above the five-year average. The oversupply is widely expected to push prices to 10-year lows.                          

Electricity

For the ninth consecutive week temperatures have averaged above normal.  For the tenth consecutive week, temperatures are forecasted to be above normal, however, only 2⁰F as compared to last week’s balmy 18⁰F above normal.  We expect On-Peak prices to average in the mid $30’s for the week.  This summer’s and next winter’s forward power prices were up in NYC (NYISO Zone J) by $0.60 and $0.70 per MWh respectively.  The NYISO summer strip (May through October) capacity auction is taking place this week and the results should be known next week.  Capacity prices have held strong heading into the strip auction.  Energy prices in Public Service Electric and Gas were also up for these same periods by $0.60 per MWh for both the summer and winter months.

Leave a Comment March 26, 2012

Market Update 3-19-12

Heating Oil

Heating oil was up approximately 0.03% during the week ending 3/16. The opening price on Monday 3/12 was $3.264 a gallon and closed on Friday 3/16 at $3.265 a gallon. Oil prices rose more than 2 percent on Friday on support from the continuing tensions over Iranʼs disputed nuclear program and the potential for supply disruptions in the region along with the weaker dollar. Investors also weighed the oil market’s reaction to a news report Thursday—later denied—that the U.S. had reached an agreement with the U.K. to release oil from the Strategic Petroleum Reserve. The release of oil reserves would increase global supplies and drive the price of oil lower, at least for the short term.

 Natural Gas

Natural gas futures traded higher Friday, on an earlier report from the U.S. Energy Information Administration indicating inventories declined more than forecast last week and bottom fishing buying. On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD2.32 per million British thermal units during U.S. morning trade, climbing 2.17%. The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended March 9 fell by 64 billion cubic feet, after declining by 80 billion cubic feet in the preceding week. Analysts had expected U.S. natural gas storage to drop by 58 billion cubic feet.

Electricity

For the eighth consecutive week temperatures have averaged above normal and it should come as no surprise that this upcoming week is also forecasted to average above normal by almost 18⁰F. We expect On-Peak prices to average in the low $30ʼs for the week. This summerʼs and next winterʼs forward power prices were up in NYC (NYISO Zone J) by $0.25 and $0.90 per MWh respectively. On Wednesday, NRG filed with the NYISO its Notice of Intent to mothball 635 MW of capacity in Zone A. This is the fourth notice over the past few months of intents to mothball inefficient units in NYISO. This has led to capacity prices for NYC and Rest of State to remain strong for the May through October period. Energy prices in Public Service Electric and Gas were also up for these same periods by $1.00 and $ 0.70 per MWh respectively.

Leave a Comment March 19, 2012

Trade Show Recap

Two weeks ago we hosted a booth at the International Restaurant and Food Service Show at the Jacob Javits Center. It was a lot of fun and we made some great contacts. Check out the photos from the event.


 

Leave a Comment March 16, 2012

Market Update 3-12-12

Heating Oil

Heating oil was up approximately 0.71% during the week ending 3/9. The opening price on Monday 3/5 was $3.222 a gallon and closed on Friday 3/9 at $3.245 a gallon. Oil futures ended at their highest level in a week Friday after the U.S. government reported a solid gain in jobs last month, suggesting improvement in the economy of the world’s biggest oil consumer. The U.S. Labor Department’s monthly nonfarm payrolls report said U.S. employers added 227,000 jobs in February, beating expectations for an increase of 213,000 jobs. The unemployment rate was unchanged at 8.3%. Traders typically take cues from the monthly jobs report, the most-closely followed indicator of U.S. employment, because it offers insight into the economic health of the world’s biggest crude-oil consumer. An improving economy is generally correlated with increased demand for oil and fuel products.

Natural Gas

Natural gas is falling sharply after U.S. supplies declined less than expected last week. A mild winter has caused weak demand for natural gas, which is used to produce electricity and heat homes. There also is a huge increase in supply because producers are accessing more underground reserves. The Energy Department says natural gas in storage fell by 80 billion cubic feet. Analysts had predicted a decline of at least 82 billion cubic feet. Gas in storage totals 2.433 trillion cubic feet, about 43.6 percent more than last year. The number of rigs actively exploring for oil and natural gas in the U.S. is down by 16 this week to 1,973. Despite the falling gas rig count, gas production levels have not shown much decline and estimates suggest that production will continue to rise in 2012.

Electricity

For the seventh consecutive week temperatures have averaged above normal and it should come as no surprise that this upcoming week is also forecasted to average above normal by almost 15⁰F. We expect On-Peak prices to average in the mid $30’s for the week. This is slightly lower than last week as there should be no below normal days. This summer’s and next winter’s forward power prices were down in NYC (NYISO Zone J) $1.25 and $0.75 per MWh respectively. Capacity prices for NYC and Rest of State continue to be strong for the May through October period offsetting the decline in summer power prices. Prices in Public Service Electric and Gas were down slightly for these same periods by $0.20 and $0.50 per MWh respectively.

Leave a Comment March 12, 2012

Market Update 3-7-12

Heating Oil

Heating oil was down approximately 2.53% during the week ending 3/2. The opening price on Monday 2/27 was $3.280 a gallon and closed on Friday 3/2 at $3.197 a gallon. Oil prices retreated as fears of a supply disruption in Saudi Arabia eased and broader markets pulled back. Prices also were pulled lower by weaker stocks. Friday’s retreat sent oil prices into negative territory for the week, with NYMEX crude down 2.8% over the last five sessions. The oil market has been closely attuned to the possibility of supply disruptions. The source of worry most recently has been Iran, whose nuclear program has provoked a standoff that analysts have said could lead to a halt of exports, military conflict or disruption of maritime traffic in the Strait of Hormuz, a major oil conduit.

Natural Gas

The U.S. Energy Department’s weekly inventory release showed a lower-than-expected drop in natural gas supplies, as warmer-than-normal temperatures across the country have restricted the commodity’s requirement for power burn. In fact, gas stocks – currently some 45% above benchmark levels – are at their highest point for this time of the year, reflecting low demand amid robust onshore output. As a result of the less-than-expected shrinkage during the past week, the current storage level – at 2.513 trillion cubic feet (TcF) – is now up 756 Bcf (43.0%) from last year and 780 Bcf (45.0%) over the five-year average. With this huge and sharply widening natural gas surplus, inventories in underground storage are likely to end the winter close to their highest level of 2.1 Tcf set in 1983.

Electricity

For the sixth consecutive week temperatures have averaged above normal and it should come as no surprise that this week is also forecasted to average above normal (by 3.3⁰F) after a couple of below normal days. This week’s temperatures should average slightly above this past week’s. We expect On-Peak prices to average in the mid to high $30’s for the week. This is slightly higher than last week as cold blast of weather is expected for Monday and Tuesday before returning to above normal temperatures for the later part of the week. This summer’s and next winter’s forward power prices were down in NYC (NYISO Zone J) $2.20 and $1.10 per MWh respectively. Capacity prices for NYC continue to be strong having climbed $2.50 per kW-mo for the May through October period offsetting the decline in summer power prices. Prices in Public Service Electric and Gas were also down for these same periods by $1.75 and $1.80 per MWh respectively.

Leave a Comment March 7, 2012

PSEG Forecasts Continued Migration To Competitive Suppliers

A little more than a decade after deregulation enabled customers to choose energy suppliers while keeping their utility for delivery and customer service issues, customer migration to ESCOs continues. This trend demonstrates that measurable savings can be achieved by utilizing alternative energy suppliers. It also demonstrates that the flexibility in pricing and benefits offered by ESCO’s presents an attractive alternative to the plain vanilla offerings of the local utilities.

According to the latest NJ BPU reports for January 2012, 7% of natural gas customers and 12% of electricity customers migrated to ESCO’s for their commodity supply needs. As measured in load, 25% of natural gas and 38% of electricity volumes have migrated, indicating that larger commercial and industrial users have been the earliest adopters to realize the benefits of deregulation.
The pace seems to be accelerating and reaching material levels as evidenced by PSEG’s latest quarterly SEC filing for the period ended December 31. According to the filing, an estimated 34% of PSEG’s volumes were provided by ESCO’s, up from 27% at the end of 2010. For 2012, the Company forecasts this percentage to increase to 36%-40%.

When examining offerings such as ours here at Marathon, it’s easy to see how this trend will continue. We offer a multitude of plans to fit our customers’ needs and usage patterns, we provide documented savings to the rates offered by the utilities on our website, and our unique Marathon Points program adds another 1%-2% in savings. With points redeemable in debit cards that can be used just about anywhere, it’s a no-brainer for commercial and residential customers to spend 5 minutes signing up to start saving money. Marathon’s supply charges are included in PSEG’s monthly bill so both the corporate and family CFOs will be happy to continue to pay just one utility bill each month.

3 Comments March 2, 2012

Market Update 3-1-12

Heating Oil

Heating oil was up approximately 3.04% during the week ending 2/24. The opening price on Monday 2/20 was $3.190 a gallon and closed on Friday 2/24 at $3.287 a gallon. Oil rose to the highest level in more than nine months as jobless claims held at a four-year low in the U.S. and German business confidence surpassed forecasts. The growth in German confidence eased concern that the region’s largest economy would be affected by the European debt crisis. Oil prices have surged over the past month, gaining 9.6 per cent since the beginning of February on improving economic data and growing tensions surrounding Iran.


Natural Gas

Natural gas futures fell Friday as investors kept their focus on the massive supply surplus that is putting pressure on the market. Natural gas for March delivery recently traded 3.3 cents, or 1.3%, lower at $2.588 a million British thermal units on the New York Mercantile Exchange. Friday’s drop extended losses suffered Thursday after the U.S. government provided its weekly data on gas stockpiles. The Energy Information Administration said inventories stood at 2.595 trillion cubic feet, 41% higher than last year and 40% above the five-year average for this time of year. Gas futures are down 34% since November due to the oversupply situation, and analysts are concerned that supplies will continue to increase as temperatures rise.

Electricity

For the fifth consecutive week temperatures have averaged above normal and it should come as no surprise that this week is also forecasted to average above normal (by 4.4⁰F) and only slightly below last week’s average temperature.  We should expect that On-Peak prices should average in the mid $30’s for the week as it did last week.  This summer’s and next winter’s forward power prices were down in NYC (NYISO Zone J) $0.75 and $0.65 per MWh respectively.  Conversely, prices in Public Service Electric and Gas for these same periods were up $1.10 and $0.65 per MWh respectively.

Leave a Comment March 1, 2012


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