Cold = bonanza for NG supply chain
Cold = bonanza for NG supply chain
A. HOW BIG IS THE COST OF COLD WHEATER FOR PEOPLE AND BUSINESSES ?
Well, on some days it is bigger than if they would live on south pole
geeeesus
Jan 6 2014 low in Chicago reached a record for the date of minus 16 degrees Fahrenheit
(minus 27 Celsius), beating the mark of minus 14 set in 1884 and 1988,
according to the National Weather Service.
South Pole that morning was 6 F below.
That means places like Chicago, Detroit, Cleveland and Pittsburgh,
all those places are colder than the South Pole.”
geeeesus
. On just one day last week, the temperature in all 50 US states fell below freezing.
In the US and Canada, more than 200m people were caught up in freezing conditions,
believed to be caused by a polar vortex
https://metrouk2.files.wordpress.com/2014/01/1301-weather-part-2.png?w=650&h=358&crop=1#038;h=413
The low of minus 13 F in Fort Wayne, Indiana, beat the old mark of minus 12 F set in 1970
In Burlington, Iowa, the mercury fell to minus 14, F which was also recorded in 1970.
The lowest temperature of the day was minus 40 F = MINUS 40 C in Brimson, Minnesota,
Parts of Niagara Falls came to a standstill -pictures here
https://www.ctvnews.ca/canada/images-capture-moments-niagara-falls-froze-over-1.1630526
Williams, who has lived in Niagara Falls for eight years, said he's never seen them like this.
Some NG pipelines IN NORTH - EAST DECLARED FULL CAPACITY
SORRY , LARGER THAN NOW NG DELIVERIES ARE PHYSICALLY IMPOSSIBLE
PRETTY SCARY
Prices on the East Coast to briefly spike as high as $95/mmBtu
, as demand overwhelmed pipeline capacity.
Scientists cannot be definite on whether or not we are going to see more
instances of severe weather like this in the near future
But when it does come, it will be hard-hitting
B. WELL....RINSE , REPEAT ,JAN 20 HERE WE GO AGAIN
After 1 warmer week HERE WE GO AGAIN
Jan 20 wind chills alerts Ontario
https://weather.gc.ca/warnings/index_e.html?prov=son
1. IE. TORONTO Wind chills of minus 30 C to 35 C tonight and Tuesday morning
geeesus .....and whole week till end Jan is similar
2. IE January 20, 2014 Ohio Governor Kasich issues statewide
Energy Emergency declaration
Shortages of propane gas and home heating oil
Chart of Ohio's residential propane prices, HERE
https://www.gannett-cdn.com/-mm-/dc276ba429c40248a53dab77d27295c0aebe088a/c=2-0-800-600&r=x383&c=540x380/local/-/media/WKYC/WKYC/2014/01/18//1390096877000-chart.png
3 .IE CHICAGO JAN 20
Mean Temperature -23 °C= actual , -4 °C aver
Max Temperature -19 °C = actual , -1 °C aer , vs record + 15 °C (2008)
Min Temperature -27 °C = axtual -8 °C aver , vs record -26 °C ( Jan 6 2014)
Heating Degree Days 74 actual , 41 aver = 80% ABOVE AVER
======================
C . HOW MUCH E X T R A NG BURNED $$ ABOVE NORMAL WINTER REWENUES somebody in THE NG SUPPLY CHAIN MADE IN JUST 1 WEEK ENDING JAN 10 ?
1 JUST ONE COLD WEEK = 287 BCF
The week ending January 10 posted a record-high net withdrawal
of 287 billion cubic feet (Bcf) from underground, natural gas storage facilities.
The January 10 withdrawal is the largest for the 20 years for which data exist
Cumulative net withdrawals, as of January 10, 2014, exceeded the previous record
level posted during the 2000-2001 heating season
https://dailyfusion.net/wp-content/uploads/2014/01/eia-cold-weather-gas-withdrawals-01-450x225.png?169ea4
2. WEEK STARTING JAN 20 WILL BE NOT AS BAD BUT SIMILAR
SAY 250 BCF
AND WE ARE ONLY HALF WAY THROUGH THIS HISTORICAL WINTER
3. Natural-gas inventories have fallen by 1.3 trillion cubic feet, or 34%, since Nov. 8.
MAKE IT 1.6 T CF WITHIN NEXT MONTH
It is a sign that a supply glut that has lasted for more than four years
is finally easing, a development that could keep prices elevated for months to come.
Some expect supplies at the end of the winter heating season in March
to be at their lowest in six years,
when gas from the shale production boom was just beginning to flood the market.
If supplies fall below one trillion cubic feet, it could leave the market vulnerable
to a sharp price increase should a summer heat wave lead to higher demand
, analysts and traders say.
Stockpiles are now 15% below the five-year average for this time of year.
Higher prices could entice companies to ramp up output= long producers
UNTIL, THEY FILL UP THE STORAGE BUCKET UP TO THE RIM AGAIN .
4. The natural gas-weighted heating degree days value is expected to be 46.5 today
, according to Commodity Weather Group,
beating the century’s previous high of 45.1 set on Jan. 16, 2009.
5 . JUST 2 COLD DAYS = 125 bcf
. Bentek Energy estimated stock draws hit 57.1 Bcf on January 6
, and then 67.9 Bcf the following day.
6. All the predictions about normal winter
and predictions about NG winter demand ( and whole 2014 )
proved to be worthless.
EIA . projected natural gas consumption falls by 1.6 Bcf/d (2.2%) in 2014
Just Jan consumption turned that prediction into laughing stock
loool
7. in 2015 as retirements of coal power plants rise in 2015
in response to the implementation of the Mercury and Air Toxics Standards
natural gas consumption in the power sector will increase further.
Natural gas prices in the Northeast spiked to between $30 and $40 higher
than the benchmark Henry Hub price
. On the Transcontinental Pipeline’s Zone 5 line, which serves Mid-Atlantic customers
, prices reached $72.43/MMBtu on Monday JAN 20
. Prices in New York and New England also rose far into the double digits,
with Transco’s Zone 6 delivery point, serving New York City, at $56.59/MMBtu,
and the Algonquin Citygate, serving Boston, at $34.14/MMBtu.
=========================
D. WHAT IS THE EXTRA COST TO THE CONSUMER ?
WICH EQUALS EXTRA PROFITS FOR THE NG SUPPLY CHAIN
JUST LOOK AT YOUR GAS / ELECTRICITY (if electr heat) BILL .
....YOU HATE THEM ALREADY ... DON'T YOU ?
WORSE ..YOU CAN DO NOTHING ABOUT IT
WELL, IF YOU CAN NOT BEAT THE ENEMY ,,,JOIN IT.
ONE OF THE ENEMY IS JE ..AND THE LIKELY RISE IN JE SP
(due to likely increase in sales vol vs last Y by as much as 30% ..see below )
SHALL PAY FOR OUR HEATING BILS AND THEN SOME .
In case JE SP will not increase much ... but given above ,
should not decrease much either .
In that case JE 11% divy should pay the bills.
Going at full capacity pelines may be eeven better long bet .
E. CONSUMER PAID $ 20 B EXTRA so far THANKS TO " polar vortex"
AND COUNTING ( here goes Santa Claus loool )
The EXTRA profits on 1.5 tcf NG withdravals for the winter
will be DIVIDED differenty for different cos depending in what segment
of supply chain they are
On bottom of food chain the producers , or the storage cos
sell 1.5 tcf more and make $ 6 b more in revs at $ 4
( if price rises 10% as is the case now than $ 6.6 b )
With all the miidleman in betwen ( pipelines utilities , upgrading etc)
the price for consumer VARY WILDLY depending on market
FROM $ 8 TO $ 20 IN OCT 2013 = BEFORE WINTER SPIKES SEE HERE ( EXEPT HAWAI $ 46)
https://www.eia.gov/dnav/ng/ng_pri_sum_a_epg0_prs_dmcf_m.htm
FOR 1000 CF = 1 MILLION BTU
SO, THE MARKUP FROM HENRY HUB $ 4 IS 100 - 500%
iN NORTH - MID-EAST WHERE BIGGEST POPULATION IS , THE PRICE IS $15-18
= 400% HIGHJER
MEANS, ABOVE $ 6 b EXTRA PROFITS FOR PRODUCERS TURN INTO
$24 B EXTRA COST FOR RESIDENTIAL CONSUMERS note 1
GEEEEEESUS
THAT'S AVER $ 300 PER HOUSEHOLD MORE than normal winter
so far , and can be $ 600 more by end March
(assuming 100m households affected)
If this , say $ 500 more is 40-50% higher bill for us
than a strong suspition is , that
cos like JE will have 30% higher revs this winter.
( assuming same JE number of customers )
F. ENTER JAN 20 2014 PRICES
1. On the Transcontinental Pipeline’s Zone 5 line prices reached US$ 72.43/million BTU
4 TIMES HIGHER THAN AVER PRICES IN NORTH EAST
GEEEESUS
Prices in New York reached US$ 56.59/million Btu = 3 X HIGHER
and New England US$ 34.14/million Btu, = 2 X HIGHER
NA.... THAT'S A FINANCIAL VORTEX
SOMEBODY IS MAKING DURING COLD SPELL IN 1 WEEK
AS MUCH AS IN 1 NORMAL WINTER MONTH
i guess not JE for the portion of guaranteed contracts
Maybe only for the "flexible " contracts
But higher sales volumes apply to both regardles of prices
in the Northeast prices jumped to between US$ 30 and US$ 40
higher than the benchmark.
GEEEESUS
===================
NOTE 1 IF YOU COMPARE YEARLY RESIDENTIAL PRICE CHANGE , here
https://www.eia.gov/dnav/ng/ng_pri_sum_a_EPG0_PRS_DMcf_a.htm
THE DRAMATIC 3 times cut IN NG SINCE 2008 = $ 11
https://www.nasdaq.com/markets/natural-gas.aspx?timeframe=10y
TURNED JUST TO 10-20% DROP FOR RESIDENTIAL PRICES
GEEESUS
THE GUYS BETWEEN YOU AND PRODUCERS ARE MAKING BIG BUCK
REGARDLESS OF PRODUCENT PRICES ,THOUGH MUCH BIGGER BUCK
AFTER PRODUCER PRICE DROPPED
JE IS AMONG THOSE GUYS
On the other hand ,those who previously locked up for 5 y with JE
higher NG prices
did not lose too much and in some markets even gained
( on top of peace of mind ) vs chosing to "float" with market prices
Take IE Maine from above table
2007 lock up at $16.90 ( NG price = $ 10)
2008=17.47 = relative loss 57 c ( NG price = $8 to 12 )
2009 = 16.43 = gain 47 c ( NG price = $ 8 to 7 )
2010= 14.14 = gain $ 2.76 ( NG price = $ 7 to 6 )
2011= 14.20 = gain $ 2.70 ( NG price = $ 6 to 4 )
2012 = 15.94 = gain 96 c ( NG price = $ 4 = bottom)
2013 looks like aver 16 = 90 c gain ( NG price = $ 4.8 -- 3.6= second bottom -- 4.4 )
LOOKS 3 TIMES CUT IN NG PRICE DID NOT CAUSE RELATIVE LOSES
FOR PEOPLE WHO LOCKED UP WITH JE AT THE TOP
IN CASE OF MAINE ( OTHER MARKETS DIFFER BUT NOT THAT MUCH )
JUST THE OPPOSITE - THEY PAID IN AVER 10-15 % LESS
during those 5 Y THAN IF THEY WOULDN'T HEDGE .
BECAUSE 90% BENEFITS OF NG PRICE DROP WENT TO
MIDDLEMAN AND NOT TO PEOPLE
GEEEESUS ... WHAT A SCAM
note 2
who benefited = screwed us the most
LOCAL UTILITIES ARE MARKING UP BY 100- 400%
see the prices at city gates here
https://www.eia.gov/dnav/ng/ng_pri_sum_a_EPG0_PG1_DMcf_a.htm
They are not much higher than producent prices
( pipelines mark up just 10-20% .and in many cases not at all )
IN MANY CITIES THE CITY GATE PRICE IS
BELOW AVER PRODUCENT PRICE
GEEEESUS
Granted , the last mile is most costly but still... THAT'S TOO MUCH
THE ONLY WAY TO STOP SUCH SCAMS IS DEREGULATION
ALLOWING GUYS LIKE JE TO GIVE THE CUSTOMER A CHOICE
IN LONG RUN THE DEREGULATION WILL BENEFIT US SAME AS
DEREGULATION OF TELECOMS
FROM SAY $1- 2 /MIN FOR OVERSEAS CALLS TO FREE US /CAN LONG DISTANCE
AND 1-2 C / MIN OVERSEAS
DEREGULATION OF TELECOMS CREATED MANY NEW MULTIBILLION COS
AND HUGE NEW competitive MARKET
UTILITIES ARE MANY TIMES BIGGER MARKET THAN TELECOMS
THE OPPORTUNITIES FOR NEW ENTRANTS LIKE JE
ARE MUCH BIGGER THAN THE NEW ENTRANTS INTO TELECOMS HAD IN THE PAST
( though harder to get the right winning strategy and more capital -intensive )
================
LOCKING -UP NOW WITH JE and others = NEAR THE 10-15 Y BOTTOM OF NG PRICES
can be much more profitable for customers than in the past .
The supply surge will be absorbed by the LNG exports terminals
due to go on line soon
and the new power plants burning NG instead of coal.
Plus the trend of world cos relocating to US energy intensive plants
to take advantage of cheap NG ( IE Japan pays $ 11 for LNG )
This winter in just 2 months absorbed the oversupply ALONE .
$ 4 is near the cost anyways = lasting drop below that is unlikely
Lower price won't cause much bigger demand anyways
- you won't heat the house in summer just because NG is cheaper.
YOU WON'T HEAT MORE EVEN IN WINTER , BECAUSE FOR YOU
THE PRICE IS NOT CHEAPER AT ALL
sorry
..your friendly utility