Thursday, February 07, 2008

NEI's Energy Markets Report - January 21-January 25, 2008

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

Electricity peak prices decreased $3-7/MWh at the ERCOT and Palo Verde hubs. The other four hubs increased $2-12/MWh. Colder temperatures at the NEPOOL and PJM West hubs elevated prices by more than $10/MWh (Platts, see pages 1 and 3).

Gas prices at the Henry Hub decreased $0.13 to $8.14/MMBtu. The holiday week and above average gas supplies contributed to the spot price declines. During the first 76 days of the heating season (began November), a net volume of 964 Bcf of natural gas was withdrawn from underground storage which was significantly higher than for the same period last year. If withdrawals for the remainder of the heating season equal the drawdown for the comparable period of last winter, storage would be about 16 percent below the previous end-of-March stocks (EIA, see pages 1 and 3).

Estimated nuclear plant availability advanced to 95 percent last week. Seabrook automatically shut down due to a turbine trip. Summer manually tripped after failure of a feedwater flow control valve (NRC, see pages 2 and 4).

Crude oil prices fell $3.93 from the previous week to $90.83/barrel. Since November, crude oil prices have averaged almost $35 per barrel higher than the year before (EIA, see pages 1 and 3). The spot price of uranium fell to $78 and $82/lb U3O8 according to UxConsulting and TradeTech. TradeTech stated that political uncertainty is playing a pivotal role in the uranium market. Some market participants view this week’s announced delay in the signing of the proposed amendment to the Russian Suspension Agreement as a bellwether of potential supply uncertainty, while others view the announcement as a natural part of the negotiation process. Some buyers view the current price drop as an anomaly and are considering purchases, although others continue to “bargain hunt” (see pages 1 and 3).
For the report click here. It is also located on NEI's Financial Center webpage.

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