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The April natural gas pulled back today after 2 days of strong rallies that brought us up through the highest price in weeks and finally succumbing to sellers and settling at $4.244 on the day. The EIA storage change number came out at a draw of 6 bcf which was pretty much in line with estimates but the market decided it needed to take some profit and pushed down almost 20 cents from the high prices in the morning before rallying back slightly. The adjustment in the 6 to 10 day forecast did not help today’s market either as we went from much below average temperatures predicted for the entire eastern half of the country to slightly below average temperatures along the eastern seaboard. As with every market in doesn’t go up in a straight line and the market does have some corrections; however we see this in light of higher prices in the next few weeks. On a different note, analysts have noticed that our friends down south have been importing more natural gas and that US exports to Mexico are up 0.4 Bcf/d over the first three months of the year compared to last year, averaging close to 1.0 Bcf/d. This is one of the few ways that US gas prices can be affected by sky-high global LNG prices, as Mexico turns away LNG cargoes in favor of bargain-basement US gas prices as compared to liquefied natural gas prices north of $8.00 and higher being sold in other countries. Total pipeline capacity from the US to Mexico is approximately 3.0 Bcf/d
In the State of Pennsylvania this week, Duquesne Light's latest cost increase for residential power and the way the utility sets its prices have helped open the door to competing suppliers, Pennsylvania's consumer advocate said Wednesday. Eight companies’ list prices lower than Duquesne Light's 8.89 cents per kilowatt hour on state websites comparing costs for electricity. Large competitors are promoting a 7.49-cent deal, or 16 percent off the utility's price. Other discount offers range from 7.19 cents to 8.45 cents. Some prices are locked in through the end of 2011 or longer, while others fluctuate -- meaning if energy costs rise suddenly, customers could pay more than the utility price while some deals have early termination fees of $100 or more. Duquesne Light began a default service plan in January that raised the utility's price by 0.72 of a cent and runs through May 31, 2013. Most other utilities such as West Penn Power adjust prices quarterly a spokesperson indicated. The recent influx of competing residential suppliers is not a surprise, because most utilities statewide ended rate caps mandated by the state's deregulation law in the past year. With all Pennsylvania utilities' prices closely reflecting market prices, a critical mass of homeowners are potential customers for energy marketers. A customer who uses 1,000 kilowatt hours a month could save $15 a month or $180 a year by choosing a supplier that undercuts Duquesne Light's price by just 1.5 cents.
On the electricity front this morning, U.S. nuclear power generators plan to shut fewer reactors for refueling this spring compared to last year, curbing the number of natural gas plants needed to make up the lost generation, according to Reuters data. Nuclear plants operate around-the-clock as baseload (least cost or primary facilities that run around the clock), providing some of the lowest cost power in the country. About 18,300 megawatts of nuclear generation will shut at the height of the upcoming spring refueling season in mid-April, compared with about 20,200 MW out last year, the data showed. Since 1999, spring outages peaked at 29,300 MW in 1999 and bottomed at 16,100 MW in 2004. Over the past five years, nuclear outages have averaged 21,200 MW in the spring (2006-2010) and 21,300 MW in the autumn (2006-2010). Last autumn, nuclear outages were about 18,500 MW in mid-October versus about 24,100 MW in the autumn 2009. The 104 U.S. nuclear power reactors are capable of generating about 100,756 MW of electricity, enough to power about 80 million homes. Natural gas traders follow the nuclear outages closely because plants burning gas usually make up much of the missing nuclear generation during periods of high demand. It takes about 185 million cubic feet of natural gas per day to generate about 1,000 MW of electricity.
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