Energy Markets Report

Energy Markets Report

A weekly statistical report on electricity, gas and oil markets, nuclear availability and future build.


July 7 - 11, 2014

 

Summary of Market Developments

  • Electricity peak prices fell sharply in the eastern United States last week, with smaller drops in the west. In New England, electricity prices at the NEPOOL hub fell $18 to average $46/MWh. To the south, in the mid-Atlantic, electricity prices at PJM-West fell $12 to average $54/MWh. “In keeping with the prior-session pattern, the price of next-day power moved lower Thursday, July 10, at most U.S. markets but deals in the West showed some strength despite a revision in trading products. Across the U.S., natural gas continued to exert pressure on power markets as the report of yet another above-average storage injection helped send August gas futures to a near six-month low of $4.114/MMBtu before ending the day down 5 cents at $4.12/MMBtu. The crumbling gas futures complex combined with mild weather across most of the U.S. to point spot gas prices lower in tandem, which in turn tugged most U.S. power dailies lower as gas-fired power generation remains cheap and abundant. Most spot gas markets were down just 5 cents or so on the day, but the Northeast spot gas markets remained thoroughly bearish, collapsing by an additional 50 cents in some cases. In other power supply, outages remain manageable, with IIR Energy reporting just 15,391 MW offline across North America, including 3,740 MW of nuclear generation, about 3,420 MW of coal-fired generation and 3,362 MW of gas-fired power supply. Despite leading the fuels in outages, nuclear supply is near 98% of its installed capacity, according to SNL Energy data.” (SNL’s Power Daily – July 11, 2014)
  • Natural gas spot prices at the Henry Hub fell 18 cents last week to average $4.19/MMBtu. The rig count, at 311, remained unchanged. “The U.S. Energy Information Administration expects the 2015 Henry Hub spot natural gas price to fall from its 2014 average as natural gas consumption slips and production continues to rise, according to the agency's latest Short-Term Energy Outlook. In the report released July 8, the EIA said it expects the price of natural gas at the benchmark Henry Hub to average $4.77/MMBtu in 2014 and fall to $4.50/MMBtu in 2015. Supporting the decline in value from 2014 to 2015, the EIA expects that while higher natural gas prices this year contribute to a 1.1% decline in natural gas consumption in the power sector to 22.1 Bcf/d, industrial sector demand will drive total natural gas consumption up 1.4% to an average at 72.4 Bcf/d in 2014. But in 2015, total natural gas consumption falls by 0.3 Bcf/d as a return to near-normal winter weather contributes to lower residential and commercial consumption. This is expected to counter an increase in the power sector to 22.8 Bcf/d due to lower natural gas prices and the retirement of some coal plants. Declining consumption will be met by rising production that continues to be led by growth in the Marcellus formation. The EIA expects natural gas marketed production to grow by an average rate of 4.1% in 2014 and 1.2% in 2015. U.S. production will continue to heap downward pressure on natural gas imports from Canada, expected to fall from 3.7 Bcf/d in 2014 to 3.1 Bcf/d in 2015, which would be the lowest level since 1987. At the same time that imports shrink, the expansion of a U.S. export market is expected to continue as several companies are planning to build liquefaction capacity to export LNG from the U.S.” (SNL Energy’s Daily Gas Report – July 9, 2014)
  • Uranium spot prices remained unchanged last week, from the previous week, apart from a ten-cent increase reported by TradeTech, bringing the average price to $28.30/lb U3O8.
  • Average U.S. nuclear plant availability rose one percent last week, to 98 percent. Oyster Creek shut down to inspect and replace electromagnetic relief valves and, during restart three days later, shut again because of low condenser vacuum. (Platts and company reports)