March 9th 2020
YOUR WEEKLY JOLT
The implosion of an alliance between OPEC and Russia has led to the worst one-day crash in crude prices in nearly 30 years. U.S. oil prices and global benchmark Brent Crude could have their worst day since 1991.
Saudi Arabia shocked oil markets by launching a price war, trying to retake global market share after Russia refused to go along with OPEC’s efforts to rescue the oil market from a plunge in demand caused by the coronavirus outbreak.
Safe to say these are trying times for our industry, and for the world. But it’s important to remember to persevere and stay positive despite external factors urging you to do otherwise.
We hope this week’s Jolt will give you a small dose of positivity you most likely need right now. Feel free to pass it on to anyone you think would benefit from a positive Jolt as well (like perhaps that co-worker you have sitting next to you? You know the one…)
- Prompt-month heating oil futures decreased 7.09% for the week ending Friday, 3/6, as prices fell $0.1057 per gallon.
- On the New York Mercantile Exchange, crude futures for delivery in April closed at $41.31 per barrel on Friday, 3/6, down 10.33% for the day, and down 15.12% for the week.
Why So Crude? Crude oil prices were in free fall last week and continued to drop on Monday, trading around $34 a barrel. Trading in U.S. stock markets was halted just minutes after opening on Monday, as the New York Stock Exchange’s ‘circuit-breakers’ were triggered amid a wave of panic selling. Saudi Arabia initiated an all-out price war to reclaim market share from Russian and U.S. shale producers, driving prices down sharply. The kingdom indicated that they would significantly raise output in a market that is already oversupplied due to a Coronavirus-related collapse in demand. This move marks the end of four years of cooperation between OPEC and Russia and the start of a new free-for-all in the crude oil market. The Baker Hughes oil rig count rose last week, going from 678 to 682 and indicating increasing domestic production.
- Prompt-month natural gas futures increased $0.024 for the week ending Friday, 3/6, to settle at $1.708/Dth.
- Overall supply decreased by 0.7 Bcf from the previous week. Total demand decreased by 8.5 Bcf.
- Natural gas exports in December 2019 were 481,006 million cubic feet, compared with 363,458 million cubic feet in December 2018. This is a 32.34% increase.
- Net withdrawals from storage totaled 109 Bcf, compared with the 5 year average net withdrawal of 106 Bcf and last year’s net withdrawal of 152 Bcf during the same week.
- Working gas stocks total 2,091 Bcf, coming in 176 Bcf more than the five-year average and 176 Bcf more than last year at this time.
Weekly Forecast! Expectations of sharply lower crude oil prices
should also be a drag on natural gas prices as that market tries to first find value then form a support base in the wake of OPEC+’s inability to come to an agreement on production cuts. – Yahoo Finance
- Average peak prices in NYC decreased last week, falling $1.19 to $20.56 per MWh.
- Average peak prices in Central NY’s Zone C decreased, falling $0.12 to $15.31 per MWh.
- Average peak prices in New Jersey’s PSE&G decreased, falling $0.93 to $18.20 per MWh.
- Average peak prices in New Jersey’s ACE decreased, falling $1.24 to $17.83 per MWh.
- Average peak prices in Pennsylvania’s PPL decreased, falling $0.59 to $17.42 per MWh.
- Average peak prices in Maryland’s BGE increased, rising $2.07 to $24.36 per MWh.
- Calendar 2020 prices in NYC decreased $0.49 per MWh, and Zone C prices decreased $0.62 per MWh.
- Calendar 2020 prices in PSE&G decreased $0.25 per MWh, and ACE prices decreased $0.23 per MWh.
- Calendar 2020 prices in PPL decreased $0.23 per MWh.
Does It Still Stink?
Vincent Gomes at the University of Sydney and his colleagues used leftovers from notoriously smelly durians and jackfruits, the world’s biggest tree fruit, to make superlight, hollow materials called aerogels. – New Scientist
Bendable Concrete! Of all the words that describe concrete, “bendy” probably isn’t one that immediately springs to mind. But that could very well change in the near future. – Digital Trends
In The News
Ending On A Positive Note: Despite the gloom that hangs over much of the globe at the moment, youngsters are still making their deep space dreams come true and inspiring us all. – Now This News