Energy News – June 2021
As we enter the summer months, we are happy to look for warming temperatures and more time spent outside. Further, this June, we can be even more grateful to have both warming temperatures and the beginnings of our “return to normal” after what has been a long 15 months. State economies are quickly opening up, rolling back public health mandates, and giving us all a taste of the summers we have come to love.
Winter Storm Uri
As we continue to monitor the effects of Winter Storm Uri, the Energy Information Administration (EIA) has now released a report summarizing the national market reaction to the storm. To recap, Winter Storm Uri hit the southwest region, including Texas, with record low temperatures for over a week. As a result, oil and gas production in the state dropped dramatically as demand for natural gas soared. A few key points from the EIA report we would like to highlight are as follows:
- U.S. natural gas production fell 7% from January 2021 to February 2021. This is the largest monthly decline on record.
- Daily gas production in Texas fell more than 10 billion cubic feet per day. This was a result of wells freezing, blocking the flow of the crude oil and gas.
- Residential gas consumption in February, on average, is lower than in January. In Texas alone, consumption reached new records, 53% higher than the year prior and 64% higher than average.
To read the report in its entirety, please click here. If you would like to learn more about Winter Storm Uri and its effects on the energy markets, please click here to read a recent blog post we published.
The Road Ahead
Although our return to pre-pandemic times has quickly come roaring back, the oil and gas production remains a few steps behind. It’s no secret that travel has come back at a rapid pace, as has commuting to work and seeing loved ones. For that reason, we expect consumer oil and gas prices to remain increased.
Winter Storm Uri demonstrated a clear need for better energy infrastructure in the U.S. Not only does this include winterizing pipes and wells in areas of the country that don’t normally experience cold weather, but also diversifying our energy production methods. February demonstrated that we can not rely on one source for our energy. Natural gas may be an easy and efficient way to generate power; however, this needs to be mixed with other sources such as solar and wind to lower the demand on one. It goes without saying that these future steps are currently up for debate in the political sphere, but without any changes, the energy crisis will continue to occur more frequently.
As always, if you have any questions or would like to discuss your energy needs, please reach out, and we would be happy to discuss how we can best help you.
Market Data – June 2021
Weekly Natural Gas Storage
CME (Henry Hub) Natural Gas Futures $/Dth
Utility Costs of Gas/ Dth
|Month||MidAmerican – IA||Alliant – IA||Black Hills – NE||Black Hills- IA||Xcel Small Volume||Xcel Large Volume|
Local First of the Month Markets
|Month||NNG Ventura||Chicago Citygates||Colorado Interstate Gas|