Skip to main content

Natural Gas Notes: R.W. Beck Projects 15% Price Cut

By Eric McErlain
Energy Consultants R.W. Beck have cut their 2006 natural gas price forecast by 15%. From a company press release:
The latest natural gas market analysis from management consulting and engineering firm R. W. Beck, Inc. supports a reduction to its calendar 2006 forecast Henry Hub price - bringing it to $7.60 per MMBtu.

The new price deck is $1.40 lower than the $9 per MMBtu price R. W. Beck predicted during the first two quarters of 2006. The decrease stems primarily from January's mild weather, which led to lower prices during the second quarter.

"Taking into account the current storage overhang, with normal injections for the rest of the summer, we are projecting a November 1 inventory of 3.55 Tcf, only 0.25 Tcf higher than the previous high recorded in 2004," says Catherine Elder, leader of R. W. Beck's Natural Gas & Fuels practice in Sacramento. "We, therefore, don't think prices will go much lower, absent an extraordinarily mild summer or lower oil prices," she says.

Elder adds, however, that unresolved world tensions may lead R. W. Beck to maintain the assumption of oil at $65 per barrel into 2007. Doing so would increase the 2007 forecast natural gas price from $7.20 to $7.79.
The latest forecast is available for download.

Turkey, which recently made noises about wanting to build three nuclear power plants (possibly with Russian assistance), is apparently facing a series of blackouts and brownouts thanks to higher natural gas prices.

And finally, via Megawatt Daily (subscription required), a Merrill Lynch report projected that electricity demand growth will outstrip capacity additions in the U.S. by more than 31,000 MW through 2010. As a result, more natural gas-fired capacity could be pressed into service as peaking capacity as a "stop-gap measure."

Technorati tags: , , , ,

Comments

Post a Comment

Popular posts from this blog

Fluor Invests in NuScale

By
You know, it’s kind of sad that no one is willing to invest in nuclear energy anymore. Wait, what? NuScale Power celebrated the news of its company-saving $30 million investment from Fluor Corp. Thursday morning with a press conference in Washington, D.C. Fluor is a design, engineering and construction company involved with some 20 plants in the 70s and 80s, but it has not held interest in a nuclear energy company until now. Fluor, which has deep roots in the nuclear industry, is betting big on small-scale nuclear energy with its NuScale investment. "It's become a serious contender in the last decade or so," John Hopkins, [Fluor’s group president in charge of new ventures], said. And that brings us to NuScale, which had run into some dark days – maybe not as dark as, say, Solyndra, but dire enough : Earlier this year, the Securities Exchange Commission filed an action against NuScale's lead investor, The Michael Kenwood Group. The firm "misap...
1 comment
Read more

Wednesday Update

By
From NEI’s Japan micro-site: NRC, Industry Concur on Many Post-Fukushima Actions Industry/Regulatory/Political Issues • There is a “great deal of alignment” between the U.S. Nuclear Regulatory Commission and the industry on initial steps to take at America’s nuclear energy facilities in response to the nuclear accident in Japan, Charles Pardee, the chief operating officer of Exelon Generation Co., said at an agency briefing today. The briefing gave stakeholders an opportunity to discuss staff recommendations for near-term actions the agency may take at U.S. facilities. PowerPoint slides from the meeting are on the NRC website. • The International Atomic Energy Agency board has approved a plan that calls for inspectors to evaluate reactor safety at nuclear energy facilities every three years. Governments may opt out of having their country’s facilities inspected. Also approved were plans to maintain a rapid response team of experts ready to assist facility operators recoverin...
Post a Comment
Read more

Nuclear Utility Moves Up in Credit Ratings, Bank is "Comfortable with Nuclear Strategy"

By
Some positive signs that nuclear utilities can continue to receive positive ratings even while they finance new nuclear plants for the first time in decades: Wells Fargo upgrades SCANA to Outperform from Market Perform Wells analyst says, "YTD, SCG shares have underperformed the Regulated Electrics (total return +2% vs. +9%). Shares trade at 11.3X our 10E EPS, a modest discount to the peer group median of 11.8X. We view the valuation as attractive given a comparatively constructive regulatory environment and potential for above-average long-term EPS growth prospects ... Comfortable with Nuclear Strategy. SCG plans to participate in the development of two regulated nuclear units at a cost of $6.3B, raising legitimate concerns regarding financing and construction. We have carefully considered the risks and are comfortable with SCG’s strategy based on a highly constructive political & regulatory environment, manageable financing needs stretched out over 10 years, strong partners...
Post a Comment
Read more