Natural Gas:

This week, the natural gas market was a sleeper. Prices seemed to hover around the $4.00/MMBtu price range all week. The most movement we saw occurred this past Friday in which prices dropped down by .13 cents. This drop was the most movement the market saw, before it became relatively stable. With no real volatility in the market speculators can only depend upon one thing to truly dictate the market, weather. With a hotter outlook, prices should be able to climb above $4.00 once again. If the weather outlook provides a cooler than average temperature, then we should see prices continuing to fall below the $4.00/ MMBtu mark. Prices ended this past week around the $3.97/MMBtu range. That is a change of .14 cents from the previous week. Storage last week showed us an injection of 88 bcf, which was far less than this week which provided an injection of 111 bcf. The region with the highest injection was the East with a total of 58 bcf. This high injection is due to the cooler temperatures the East has been experiencing.The total amount in storage currently is 2252 bcf. This amount is still within the 5 year high and low mark, but is below the 5 year average.

Crude Oil:

Crude Oil continues to hover around the $94.5/barrel range. Oil is up from last week by $1.50. The oil market was more volatile than the NG market this past week, however that is not saying much. Traders continue to be bearish on crude oil due to the speculation involved with OPEC and our own Federal Reserve. Another factor affecting the oil market could be the emphasis on NG that many big name companies are focusing on now. With so many new shale plays being drilled, and with the large profit levels declining on oil, many companies have began to shift their focus to natural gas. According to an article posted by Kline & Company, we will continue to see more of a “economical shift” toward natural gas. However despite this bearinsh outlook, production is up on Crude oil [see News in the Market].

Commercial Electricity Rates:

ERCOT – Continues to show the largest spread. With weather forecast heating up, prices should rise gradually. Rates between .26 – .5 cents.

MISO – Due to previous weather, the Midwest is experiencing a wider spread then once predicted. Rates are expected between .2 – .34 cents.

NYISO – The New York market continues to see the highest prices among regions, with rates ranging between .32 – .52 cents

PJM – Like the Midwest, the Pennsylvania area is seeing a wider spread among it’s rates ranging between .36 – .48 cents.

Weather:

Weather seems to be the one factor driving the NG market that all the experts can agree upon. The outlook for the week calls for cooler than usual temperatures in the Midwest at the beginning of the week, only to be followed by a warm front. This front could cause temperatures to rise 2 to 4 degrees warmer than normal. The West can expect warmer than average temperatures throughout the week ranging from 2-6 degrees. The South will see much of the same, with temperatures rising 2 -6 degrees above average. Texas will see the majority of this increase. The Northeast will see relatively average temperatures for this time of year. Meteorologist have gone on record predicting a very active hurricane season. The first tropical storm, Andres, is on a collision course with parts of Florida and the Atlantic coast. Andres, is projected to not be upgraded to a hurricane thus having little to no effect on natural gas and oil prices.

News on the Market:

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Bulls on Parade -This week, the majority of the news about oil resulted in a negative feel for the commodity. However there is a positive outlook for the market with the recent news of production increasing. The past couple months on the market showed several production areas slowing to make up for the weakened demand for this commodity. The reason for such a positive outlook on the market now is due to a large decline in stockpiles. In order to counteract this large decline, production had to be increased to over 395 million barrels. Despite seeing the price of crude oil fall on the S&P 500, production has been increasing incrementally which is a bullish sign for the market.