Please visit the Direct Energy Business online customer education center, Energy Insights, to view the Weekly Energy Market Update video for July 8, 2013. Receive weekly updates that are sent right to your email inbox.
The following is a summary of last week’s market activity and the market outlook:
- Natural gas closed higher for the week, after testing 3-month lows. Technical trading, as well as significant heat in the West, helped the market regain some strength. The key technical trading level ($3.60) proved difficult to break through and stay below. The market traded higher early in the week ahead of the holiday, as many traders wanted to close positions for what was expected to be a long weekend for many.
- Last week the EIA reported an injection of 72 Bcf, which was slightly below expectations of 77 Bcf but above both 2012 (41 Bcf) and the 5-year average (71 Bcf). This year, 13 consecutive injections have exceeded last year by an average of 32 Bcf/week. The current inventory through June 28 is 2,605 Bcf, which is 491 cf (or 15.9%) below last year and 30 Bcf (1.1%) below the 5-year average.
- Weather continues to be the big risk in the short-term, as different
weather vendors are showing a wide range of forecasts from below-normal to above-normal. Short-term forecasts are calling for heat in the West (but not as hot as last week), above-normal temperatures across the northern states and New England, and below-normal temperatures for the Southeast, parts of Texas and the Midwest Plains. Long-term forecasts are showing above-normal July temperatures for most of the U.S. (except Texas and the Southeast) and mostly normal temperatures in August, except for Texas and the Great Plains, which are expected to see above-normal temps.
- Hurricane season (June 1–Nov. 30) is underway. Tropical storm Chantal has developed in the Atlantic and, at this point, is forecasted to turn right and go east of Florida. Forecasts for the season are predicting above-normal activity, but June and July are usually relatively quiet.