RBN Energy: what's behind the mid-Atlantic / Southeast natural gas price spikes. Archived.
Just downstream from the Appalachian supply basin — where daily spot natural gas prices are among the lowest in the country — cash and forward prices in the Mid-Atlantic and Southeast have rocketed, becoming the highest gas prices in the land, and in some cases are at never-before-seen levels for this time of year.
Opening comment:
- economic indicators and market action suggests:
- 3Q22 will not be as robust as some thought just a few days ago; GDP could actually go negative, third month in a row;
- market action over past two days, also suggests:
- anxiety over US - Chinese tensions
- China does not have to respond militarily to their displeasure of US actions
- China could easily take "economic" steps that could greatly affect US markets
- by this time next week, we will know more about Chinese - US fallout
- my hunch: another tempest in the teapot (whistling past the graveyard?)
- investors? buying opportunity
AAPL:
- dividend expense:
- outstanding shares: 16.403 billion
- dividend: 23 cents * 4 = 92 cents annual
- annual: $15.1 billion
- income
- revenue (ttm): $388 billion
- gross profit (ttm): $152 biillion
- bonds sold yesterday: $5.5 billion at 63 to 118 basis points over Treasury rate
INTC, link here, pay wall:
While badly wounded, Intel isn’t dead yet.
And at least one analyst thinks there could be considerably more value in the beleaguered chip company’s shares than Wall Street generally believes.
Let’s be clear: The situation is bleak. Intel last week posted one of the company’s worst quarterly reports ever, along with hugely disappointing guidance. Intel is suffering the effects of slower personal computer sales (which many had already expected), softer demand from data center customers (which was an unhappy surprise), and continued market share loss to rival Advanced Micro Devices.
One word: Nokia.
LNG, global:
- Australia may limit LNG exports amid domestic gas shortage; link here.
- US: Freeport LNG export terminal should be back on line by end of October, 2022
MPC:
- MPC must have had a good earnings report;
- on another down day for the market, MPC is up 2.5%; up $2.23; trading at $72.40
- let's check the earning report:
- "Marathon Petroleum 2Q revenue jumps on surge in demand"
- seriously, did anyone think otherwise; is this news?
- results:
- EPS: wow -- $$10.61 vs consensus of $9.17; whisper number: $9.34; huge beat
- revenue: $54.2 billion vs $37.2;
- grew 82% year/year
- for perspective, Apple revenue for this quarter: $83 billion (vs est $82.4 billion)
********************************
Back to the Bakken
Far Side: link here.
WTI: $94.17.
Natural gas: $7.783
Thursday, August 4, 2022: 3 for the month, 34 for the quarter, 373 for the year
- 38170, conf, CLR, LCU Foster Federal 7-28H,
Wednesday, August 3, 2022: 2 for the month, 33 for the quarter, 372 for the year
- None.
Tuesday, August 2, 2022: 2 for the month, 33 for the quarter, 372 for the year
- 38169, conf, CLR, LCU Foster FIU 6-28H1,
RBN Energy: what's behind the mid-Atlantic / Southeast natural gas price spikes. Archived.
Just downstream from the Appalachian supply basin — where daily spot natural gas prices are among the lowest in the country — cash and forward prices in the Mid-Atlantic and Southeast have rocketed, becoming the highest gas prices in the land, and in some cases are at never-before-seen levels for this time of year.
No doubt it’s been a sweltering summer so far, and low storage levels aren’t helping either. But there’s more to the price premiums than that. Limited access to supply and constraints on Williams’ Transco Pipeline — the primary system delivering gas to the region — have created a demand “island” there just as persistent heatwaves boosted cooling demand. Moreover, without additional pipeline capacity, the dynamics unfolding this summer could become a regular feature of the Southeast/Mid-Atlantic markets. In today’s RBN blog, we break down the factors driving regional prices to new heights.
We’ll start our analysis with what caught our attention in recent weeks: the eye-popping pricing anomalies that emerged in the Mid-Atlantic and Southeast regions starting around mid-June. Daily spot price history from our good friends at NGI shows that the national benchmark Henry Hub ran up to nearly $10/MMBtu in early June but lost steam in the second half of the month and ended June with a $6 handle. However, Mid-Atlantic and Southeast prices, represented by trading hubs along the Transco corridor, began to diverge from Henry Hub around that time.
Transco Zone 5 cash, which represents the Carolinas, Virginia and Maryland markets, had been averaging just 17 cents above Henry in the April-May timeframe and 44 cents above Henry Hub in the first 13 days of June. But prices there abruptly jumped to an all-time high for the June-July timeframe at $16.43/MMBtu on June 14, more than $7 above Henry Hub that day. For the rest of June, it averaged nearly $9.60/MMBtu, more than $2.50 above Henry Hub, and in July, Transco Zone 5 cash topped $11/MMBtu, more than $4 above Henry. Transco Zone 3 (Louisiana) and Zone 4 (Mississippi, Alabama and Georgia) June-July average prices, which had traded a few cents back of Henry in previous years, surged to premiums of $1.60-$1.75 to Henry.
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