The September natural gas wholesale contract was slightly higher on Friday settling at $3.932, up $0.04 from Thursday as energy traders decided that buying at the bottom of our trading range was probably a smart thing to do since we’ve been hovering around the $3.90 price area over the last week. This week’s EIA storage report is forecasted to be in the mid 70’s or higher and could cut the year on year storage deficit by 35 bcf depending on the actual storage figure released on Thursday. The economic slowdown that is being forecasted by some economists and the financial markets might lessen industrial output and could put a ceiling on natural gas prices given the likelihood of reduced usage if the economy does slow.
In the city of Houston today, the blistering heat this month continued Sunday, as the city racked up its 32nd 100-degree day of the year, tying 1980 for the most on record. This mark, just one day shy of setting the hottest and driest summer ever recorded in Houston's history, will very likely fall today. With little relief in sight, forecasters said there's an increasing possibility that Houston will register temperatures of 100 degrees or above every day this August. Forecasters say the high-pressure ridge that's kept the heat on and afternoon showers at bay could actually strengthen by week's end which is not great news meaning that the heat will continue.
As school children head to back to the classrooms this week in Texas and crank up air conditioners, flip on the lights and turn on microwaves that will boost demand for electricity at a critical time. On Friday, the Public Utility commission asked the ERCOT COO, “Whether the grid operator is ready for schools to open next week?”. The ERCOT spokesperson indicated that he wasn’t comfortable and hasn’t felt comfortable for the last two weeks either. The Texas Education Agency sent a letter to schools last week asking them to conserve energy by setting the thermostat a few degrees higher than usual, turning off unnecessary lights and equipment, and refraining from nonessential activities during peak demand hours, from 3 to 7 p.m. For example, don't do a large photocopy job during that time-frame as an example. Public schools normally add about 1,000 to 1,500 megawatts of demand to the grid when they come back on line in August according to an ERCOT spokesperson. That's a small portion of total demand, but it would have been enough to push the state into rolling outages earlier this month as experienced on August. 3, as demand in the Texas grid rose to a new high of 68,294 megawatts.
In the state of Texas, the New EPA rule will lead to blackouts in Texas according to the Susan Nelson, PUC chairwoman and will make the Texas electrical grid less reliable and could result in rolling power outages in the state. The rule, issued in early July by the Environmental Protection Agency, would require substantial reductions in emissions of nitrogen oxides and sulfur dioxide at power plants in 27 states, the agency said. The EPA says the rule will save and prolong lives by reducing harmful smog and soot pollution. Dallas-based power generator Luminant is asking that the EPA delay implementation of the rule, saying it doesn't have enough time to comply. The company says the industry standard timeframe for installing emission controls is several years but the rule requires compliance in six months.