The Opportunity is Still Here: The Beacon, 06/15/2020

Last week, the forward energy market stayed relatively flat, with the front end down slightly and no month after OCT2020 varying from last Friday by more than 4 cents.   The strips are stable, with none varying by more than a penny.   The 12-month strip is still cheapest, but just barely, with all of the annual strips clustered 3.1 to 8.2 cents above it.  All of the strips are holding under $2.50.   North American drilling rigs in the field are down for an 12th straight week, but the pace of decline is slowing -- only 5 rigs down this week, with the US rig count down 5 and the Canadian count flat.   That marks a 667 rig decrease in the last 12 weeks - a 69% decrease from the pre-pandemic/oil price collapse numbers.   The EIA reported a natural gas storage injection of 93 bcf -- in line with industry expectations of 95 bcf and the 5-year average of 94 bcf, but below last year's build of 107 bcf.  Storage levels are stacking up well -- still moving closer to the 5-year max, and 19.5% above the climbing 5-year average.    This week's weather map is showing more moderate expectations of temperature variations, with only the Great Plains states showing >50% chance of warmer than normal temps.    There is no tropical weather activity expected in the next week.  Current price levels continue to be worth taking advantage of, especially for 2022-2025 -- opportunities to take price risk off the table are available.  Call 937-709-0098 x701 or email Chris.Smith@LighthousePowerPartners.com to lock in prices for as much term as possible, and actively seek on-site efficiency and generation projects to lower energy spend.

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