Friday, December 14, 2007

NEI's Energy Markets Report - December 3 - December 7, 2007

Here's a summary of what went on in the energy markets last week:

Electricity peak prices varied across the country last week. The NEPOOL and PJM West hubs rose $34-40/MWh due to unseasonably cold temperatures. The ERCOT and Entergy hubs increased only $4-6/MWh and the Palo Verde and SP 15 hubs fell $4-7/MWh (Platts, see pages 1 and 3).

Gas prices at the Henry Hub increased only one cent to $7.19/MMBtu. Colder temperatures and greater electricity demand kept prices nearly static at the Henry Hub last week (EIA, see pages 1 and 3).

Estimated nuclear plant availability rose to 93 percent last week. One reactor finished a refueling outage, and two reactors finished maintenance outages (see pages 2 and 4).

By 2011, the following amounts of new generating capacity are expected to start up: 26,000 MW of coal; 52,000 MW of natural gas; and 39,000 MW of wind (see page 5).

EIA’s Short Term Energy Outlook (see pages 2 and 5)

Total U.S. electricity consumption in 2007 is projected to increase by 1.9 percent over last year. The assumed return to near-normal temperatures should keep residential electricity sales growth relatively flat at a rate of 0.2 percent next year. Slow macroeconomic growth in 2008 will also limit growth in electricity sales to the commercial and industrial sectors.

Total U.S. natural gas consumption is expected to increase by 5.0 percent in 2007, largely driven by increases in the residential, commercial, and electric power sectors that occurred earlier this year.

WTI prices are projected to increase from an average of $66.02 per barrel in 2006 to $72.05 per barrel in 2007 and to nearly $85 per barrel in 2008. Slower U.S. economic growth of 2.1 percent is projected for 2007 and 1.8 percent for 2008, compared with 2.9 percent in 2006, which may be a mitigating factor for even higher crude oil prices.
For the report click here. It is also located on NEI's Financial Center webpage.

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