NYMEX Price Slips Below $5 on Warm Weather Forecast
The benchmark NYMEX natural gas futures price at the Henry Hub lost ground for the second day yesterday, slipping below $5/MMBtu for the first time in nearly a month. The NYMEX was down 69.80 cents or 12.27% over the last two trading sessions. Ouch. However, we shouldn’t be surprised. And we don’t expect it to stay down long. The main reason for the loss is the weather–as in the forecast says we can expect warmer weather will be with us, at least in the northeast, until early November.
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S&P Global Platts and Xpansiv have joined forces to launch a new benchmark for methane performance in natural gas production in the United States. Methane Performance Certificates (MPCs) allow a U.S. shale producer to sell instruments representing zero methane emission natural gas production. Our immediate impression was to think of medieval-era indulgences sold to atone for sins.
NATIONAL: Annual U.S. coal-fired electricity generation will increase for the first time since 2014; INTERNATIONAL: Energy crisis chatter to accelerate; OPEC+ fails to meet production target; Russia decides not to increase natural gas shipments to Europe; China looks to lock in U.S. liquefied natural gas in energy crunch.
Hedging, in the case of natural gas produced by big drillers like EQT Corporation, is when the company presells the production it will make (in the future) under contract at a specific price. Typically companies like EQT will hedge production for up to a year, sometimes more, in advance. It’s a way of protecting revenue from production in case prices sink below a certain level. The problem with hedging is you are locked in when the price goes up and stays up, like the price for natgas has done over the past several months. According to Bloomberg, EQT’s hedges could cost the company “more than $5 billion through the end of next year.” Ouch. CEO Toby Rice openly admits the company guessed wrong on its hedges.
A group of hardened leftist Democrat Pennsylvania legislators, in a coordinated attack with the state’s horrible Attorney General, Josh Shapiro, are making a play to shut down the fully operational Mariner East pipeline system. Two weeks ago Shapiro, who is running for governor next year, indicted Energy Transfer’s Mariner East 2 (ME2) pipeline project with 48 so-called environmental crimes (see 
Last Friday the owner of the Glen Riddle Station Apartment complex in Delaware County, PA convinced a weak county judge to order the release of emails between officials in Middletown Township and Energy Transfer, owner of the Mariner East pipeline system. The Glen Riddle apartment complex owner is hoping he can find some minor, obscure statement in the letters to reignite opposition to finishing the third and last Mariner East pipeline that runs across his property. How selfish.
What’s the best way to defeat an enemy? Without ever firing a shot, of course. Convince your enemy to bow to and obey your commands. That’s what comes to mind with one of this country’s enemies, Saudi Arabia, and a recent “technical workshop” they held via videoconference with some 100 oil and gas companies around the world. The Saudis (i.e. OPEC) were essentially telling these other oil companies, with a big smile plastered across their faces, just how much oil and gas these other companies will be permitted to produce, and when they can produce it. And these other companies, some of them in this country, obsequiously bowed to their Saudi overlords. Sickening, no?
In October 2020 the Sisters of the Corn (our name for a group of leftist nuns in Lancaster County, PA) filed yet another frivolous lawsuit against Williams over a pipeline that crosses their land–a pipeline (Atlantic Sunrise) that has been up and running safely for years (see