January 2018 Energy Report Happy New Year to all! Good or bad; 2017 is in the past and let’s make 2018 a great year! This email contains the month over month comparison of energy prices as well as the monthly commodity settlement prices. If you have any questions about your energy and waste portfolio or for an invoice and energy audits, price quotes for natural gas, electricity or waste, please contact RJ Consulting today.\ Natural Gas – WOW and WRONG For most of 2017, the wolfs of Wall Street and pretty much every commodity analyst had natural gas by January 2018 between $3.50 and $4/Dth, especially with a cold winter like some projected. The wolfs came up short but it might not be for long. Last month my projection was, “A cold winter will shake the gas market and make $3/Dth or lower gas a number for the history books, and a warm winter could send gas prices down to the $2.75/Dth range.” Surprise! The frigid weather which is worse than what was projected sent prices crashing hitting the 2017 low set on December 21; just five days before the start of the arctic blast and the market rebound taking back $0.45/Dth in five trading days. The last week of December and the first ten days of January has some of the coldest and longest temperatures below freezing many states have seen in years; creating HUGE heating demand. Natural gas was the only commodity to settle the January contract down compared to December against the other heating commodities. The natural gas drop was mainly due to the increased rig activities and traders being very long on natural gas. The gas decrease might be short-lived as 2018 will start to show some of the highest exporting the US has ever done and is expected to increase each year. Over the past three winters, February contracts have always settled less than January but don’t think this will be the case due to this cold snap; we are burning a lot of gas! My projection for the February 2018 natural gas settle is
December 2017 Energy Report This email contains the month over month comparison of energy prices as well as the monthly commodity settlement prices. If you have any questions about your energy and waste portfolio or for an invoice and energy audits, price quotes for natural gas, electricity or waste, please contact RJ Consulting today. Natural Gas and the end for 2017 December 2017 settled at $3.074, up $0.32/Dth (11.7%) from November 2017 contract. December was the last natural gas contract for 2017 brings the 2017 natural gas average to $3.11/Dth, up $0.65/Dth (26.4%) from the 2016 average. The past two winters have been mild which has helped keep consumption down and underground storage full. Heading into the upcoming winter, the weather reports are mixed and let’s be honest; no one can predict the weather for the winter season. One potential problem for pricing I see is the first time in over three years we are going into winter below the five year average which from traders perspective can be considered a shortage and a reason to price gouge this winter. The past two winters we had storage over the five-year maximum average. The US is a major producer of natural gas which is good, and we are not drilling at our full capacity. Any gas price increase should get capped as higher priced gas will bring back more drilling and help meet winter demand. A cold winter will shake the gas market and make $3/Dth or lower gas a number for the history books, and a warm winter could send gas prices down to the $2.75/Dth range. Peak Demand is Expensive With commodity prices higher this year than last and everyone looking for ways to save on energy bills by installing solar panels and upgrading inefficient equipment which is all great measures, many are missing the impact demand has. As many turns for ways to generate their power, demand is not going away and is getting more expensive each year. Solar energy does nothing to reduce demand charges, and energy efficiency helps minimize equipment demand but operation and run times
November 2017 Energy Report This email contains the month over month comparison of energy prices as well as the monthly commodity settlement prices. If you have any questions about your energy and waste portfolio or for an invoice and energy audits, price quotes for natural gas, electricity or waste, please contact RJ Consulting today. Natural Gas For the fourth month in a row, the settlement price for the promote month stayed below $3/Dth. The November 2017 contract settled at $2.752/Dth, up $0.22/Dth (Down 7.46%) from the October 2017 contract. On the production front, last week storage gained 64/Bcf to settle at 3,710/Bcf. Stocks were 189/Bcf less than last year at this time and 46/Bcf below the five-year average of 3,756/Bcf. December 2016 settled at $3.23/Dth and my projection for the December 2017 settle is between $3.10/Dth to $3.25/Dth. Right now, gas looks like it will follow the same trend as last winter. Solar Electricity Solar panels are showing up everywhere as more and more people are looking for ways to control cost with the rising cost of electricity and thinking of going green. Solar power is somewhat straightforward, when the sun hits the panels this generates electricity which is consumed behind the meter by power demand. If the electricity produced is more than the power demand, the power is pushed back to the electric grid spinning the meter backward, generating credit. Residential and commercial solar produce power the same way but have significant cost differences on the utility tariff rates. When exploring equipment, production expectations, cost, taxes and incentives, this is where solar becomes very difficult. Everyone always looks at the ROI of a system which is something that can be exaggerated to get a deal done. Solar is a long-term investment as these panels are usually expected to last 20 to 25 years. If you have questions or want to see if you might be a good candidate for solar, please contact RJ Consulting for more details. Please contact RJ Consulting if you would like to review your energy and waste portfolio. If you have any feedback or suggestions
October 2017 Energy Report This email contains the month over month comparison of energy prices as well as the monthly commodity settlement prices. If you have any questions about your energy and waste portfolio or for an invoice and energy audits, price quotes for natural gas, electricity or waste, please contact RJ Consulting today. Natural Gas For the third month in a row, the settlement price for the promote month stayed below $3/Dth. The October 2017 contract settled at $2.974/Dth, up $0.013/Dth from the September 2017 contract. On the weather front, the first two weeks of October is looking warm. We can all thank the hot finish to September for that. The last two weeks were so hot; September is now expected to finish as the 5th warmest September since 2000; after a very chilly start. On the production front, last week storage gained 58/Bcf to settle at 3,466/Bcf. Stocks were 127/Bcf less than last year at this time and 41/Bcf above the five-year average of 3,425/Bcf. At 3,466/Bcf, total working gas is within the five-year historical range. Production is expected to keep trending higher towards year-end with October production to stall a bit as maintenance will cut some volumes, but the trend remains positive based on the forecasted temperatures. The current projection is a colder than normal winter for the US with cold temperatures reaching down as far as Northern Florida and parts of Texas. If an average cold winter hits the USA, we will see gas prices up hit the $4/Dth range by the beginning of 2018 and touch the $4.50/Dth by the beginning March 2018. My projection for the November 2017 settle is between $3.05/Dth to $3.25/Dth if the cold weather forecast holds. If it does not, November should say below $3/Dth. Electricity In 2016, about 4.08 trillion kilowatt hours (kWh) of electricity were generated at utility-scale facilities in the United States. About 65% of this electricity generation was from fossil fuels (coal-30.4% and natural gas-33.8%), about 20% was from nuclear energy, and about 15% was from renewable energy sources. Each year for the foreseeable future, the
September 2017 Energy Report This email contains the month over month comparison of energy prices as well as the monthly commodity settlement prices. If you have any questions about your energy and waste portfolio or for an invoice and energy audits, price quotes for natural gas, electricity or waste, please contact RJ Consulting today. Natural Gas For the second month in a row, the settlement price for the promote month stayed below $3/Dth. The September 2017 contract settled at $2.961/Dth, down $0.02/Dth from the August 2017 contract. With the damage Hurricane Harvey had in Texas, it looks like most of the supply impact fell on gasoline prices since the damage from the storm shut down the refineries. With summer temperatures almost behind us, the gas market should remain flat for the trading month of October 2017. Right now, we are currently in a backwardation market when the futures price is below the spot price for a particular commodity. A contango situation the futures price (or forward price) of a commodity is higher than the spot price. If we experience a cold winter, the contango market will become the future. My projection for the October 2017 settle is between $2.90/Dth to $3.10/Dth. Heating Problems With night time temps getting to the low 40’s in some areas, this should be a good reminder the heating season is right around the corner. The utility company offers rebates and incentives that can help offset the cost of equipment replacement along with financing and other tools to help fix problems. If you have any questions about the utility programs and incentives; we would be glad to discuss solutions in more detail. Please contact RJ Consulting if you would like to review your energy and waste portfolio. If you have any feedback or suggestions to the monthly emails, please share! September 2017 Energy Report If you have any questions or concerns about your current energy portfolio, please call or email to discuss. Sincerely, Roman Katynski, CEP Energy & Waste Consultant, Owner RJ Consulting LLC An Energy and Waste Consulting Company
August 2017 Energy Report This email contains the month over month comparison of energy prices as well as the monthly commodity settlement prices. If you have any questions about your energy and waste portfolio or for an invoice and energy audits, price quotes for natural gas, electricity or waste, please contact RJ Consulting today. Natural Gas Finally, natural gas prices broke the $3/Dth. It only took five months of trading to settle the August 2017 contract at $2.987/Dth, down $0.08/Dth from the July 2017 contract. The cooler than summer temperatures have kept natural gas electric generation demand down. Right now, the expected range for natural gas for the rest of 2017 is between $2.90 and $3.30/Dth. Last year, the August contract settled down from July and gained $0.20/Dth for the September settle. This year could show a repeat of last year if we have an Indian summer and experience an active hurricane season. Based on the NYMEX settle graph below, it looks like we can expect to see a repeat of 2016. My projection for the September 2017 settle is between $2.90/Dth to $3.10/Dth. Electricity August typically produces some heat waves and some hot day and nights. Please remember that last year, ISO-NE set the capacity tag on August 12, 2016, between the hours of 2 pm and 3 pm as the peak demand for the Northeast. We had a few hot days in July which they might have recorded for this year, but please be mindful of the weather in August. If we are expecting a heat wave or a scorching and humid day, this could be the day when your capacity tag gets set for the next 12 months. The timing should be one hour between 12 PM and 4 PM so try and increase the thermostat a few degrees, turn off lights and other equipment that does not need to run. With the forward capacity prices at record highs, any kW saved can produce significant savings especially if you are looking to lock 24 months or longer. If you have backup generation, you might want to test