Steve’s Weekly Update for Feb 16, 2015


Market bounces both ways

Our local gas market has responded to the cold weather back East with a drop in the spot market day price and an increase in futures market pricing. Both movements are rather modest however so nothing to be too concerned about. We can interpret this as an excess of supply in our region relative to the East coupled with some market players considering the possibility that extended cold temps in the East could result in below average end of winter storage levels.

As a side note there’s no graphics in this week’s Update as a result of some uncooperative software. Our apologies, and we hope to have the issue under control in time for next week’s Update.


Temperature trends to continue

Over the next 2 weeks, cold temperatures are forecast to continue for the Eastern US and Canada, while the West should continue to enjoy warm weather.


Storage at the 5 year average, well almost

Despite the Eastern cold, natural gas storage levels continue to rise relative to the average. With a withdrawal of 160 Bcf reported last week, we are now only 0.5% below the 5 year average.


Current Pricing

Even though rig counts continue to drop, production continues to grow due to the substantial growth in wells coming on line due to past drilling efforts, . Provided the cold weather in the East is not prolonged, the stage is set for further price reductions as we approach the end of winter.

All prices are indicative at Sumas; all term purchases in CAN$/GJ for consistent daily volumes:

Day = $2.68

Mar = $3.09

Winter 2015/16 = $4.02

1 year Mar 2015 through Feb 2016 = $3.45

2 years Mar 2015 though Feb 2017 = $3.61

Summer 2015 = $3.15


Should you have any questions, please let me know at steve@cascadiaenergy.ca.

Regards,

Steve