Market Update 03-03-2017

March 3, 2017

Heating Oil

  • Prompt-month heating oil futures decreased 0.32% for the week ending Friday, 3/3, as prices decreased $0.0054 per gallon.
  • On the New York Mercantile Exchange, crude futures for delivery in May closed at $53.33 per barrel on Friday, 3/3, up 0.14% for the day, but down 0.13% for the week.
  • Crude oil prices continue to trade off of yearly highs, but have failed to breakout significantly for the 2017 trading year. Gains were short-lived as oil prices pulled back after the IEA said in a report that U.S. shale oil production may grow by 1.4 million barrels per day by 2022 with prices at about $60 barrel and pointed out that demand for European refined products may weaken.

Natural Gas

  • Prompt-month natural gas futures increased $0.040 for the week ending Friday, 3/3, to settle at $2.827/Dth.
  • Overall supply increased by 0.8 Bcf, while total demand fell, decreasing by 4.9 Bcf.
  • Net injections into storage totaled 7 Bcf, compared with the five-year (2012–16) average net withdrawal of 132 Bcf and last year’s net withdrawal of 67 Bcf during the same week. This is the first time that weekly net injections have ever been reported in February on a national level.
  • If working gas stock changes follow the five-year average for the remainder of the heating season, they will total 2,083 Bcf on March 31. So far in 2017, net withdrawals are 77% below the 5-year average.

Electricity

  • Average peak prices in NYC fell last week, moving down $2.77 to $26.03 per MWh. Peak prices hit a high of $40.26 between 6-7 PM last Friday, 3/3, in NYC; Average peak prices in PSE&G decreased, falling $1.30 to average $24.15 per MWh, topping out at $34.55 on Friday, 3/3, between 6-7 PM.
  • Around-the-clock prices for the balance of 2017 remained the same for NYC and increased $0.49 per MWh in PSE&G. Calendar 2018 prices in NYC increased $0.40 per MWh, and PSEG prices decreased $0.09 per MWh.
  • Last week, temperatures reached a high of 70°F which caused peak prices to drop although not as significantly as we had seen the week before. Temperatures are expected to be on target with historical averages. The peak prices will likely remain steady moving forward.

Weather

  • Temperatures averaged 5.29°F above seasonal figures this past week (ending 3/4), but came in 2.86°F below the previously forecasted values. This week, the NYC area is expecting temperatures to fall, with highs averaging 47°F and lows averaging 32°F. Temperatures are forecasted to be 0.64°F below seasonal averages, and 4.14°F cooler than last week’s average.
  • Temperatures last week were an average of 14 degrees above the historical data for this time of year. This week will not be as warm as last week, but there will still be some days warm enough to maintain our higher than normal trend for the beginning of March.

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