A Chance to Do Good: The Beacon, 6/1/2020

Last week, the forward energy market again held its price level, with no month after OCT2020 changing by more than 2 cents.   All strips are slightly up due to the move to a JUL2020 start, but the 12-month strip still has the best price point, with the rest of the annual strips remaining clustered in a 4.6 cent range between $2.460 and $2.506.  North American drilling rigs in the field are down sharply for an 11th straight week -- down another 18 rigs this week, with the US rig count down 17 and the Canadian count down 1.   That marks a 646 rig decrease in the last 10 weeks - a 66.8% decrease from the pre-pandemic/oil price collapse numbers.   The EIA reported a natural gas storage injection of 109 bcf -- slightly above industry expectations, just below last year's build of 110 bcf and well above the 5-year average injection of 94 bcf.   Storage levels are strong -- moving closer to the 5-year max, and still 19.3% above the climbing 5-year average.    This week's weather map is showing warmer than normal temps for the middle of the country, with the East Coast and West Coast forecasted to see cooler than normal temps.    The fast start to the hurricane season continues, with a threat of cyclone formation in the Gulf from the leftovers from Eastern Pacific Tropical Storm Amanda that could turn into the third named storm of the season - a season that officially starts today. 

THE BOTTOM LINE: Current price levels continue to show good value for 2022-2025, and opportunities to contract for a low fixed price and take price risk off the table are available.  Keep working to lock in prices for as much term as possible, and give serious thought to on-site efficiency and generation projects to lower energy spend.

Click HERE for your free copy of the Beacon.