3 min read

Baby, it's (Not) Cold Outside

By 5 on December 21, 2021

At the end of last month, the news was buzzing about the newly discovered Omicron variant. On the last day of trading for the December NYMEX contract, the December price jumped up almost 50¢ to close at $5.447, settling well below the previous month’s closing of $6.202, which was the highest closing NYMEX price since December 2008.

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Topics: Markets Natural Gas
4 min read

Renewable Natural Gas is Garbage (Literally)

By 5 on December 21, 2021

Natural gas, also commonly referred to by its chemical name, methane, is one of the single most controversial topics of the energy transition so far. On the one hand, natural gas is an energy commodity that is far cleaner than coal as a feedstock for power generation and it is a fuel for which there is no alternative in terms of its load-following characteristics. It can be dispatched on very short notice, ramp up and down quickly and easily, and can stay on-line for days on end, as long as the gas delivery network is functional (which, as we learned in Texas in February 2021, is not always the case).

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Topics: Natural Gas Sustainability Education
2 min read

Natural Gas Resistant to Omicron

By 5 on November 30, 2021

On Friday, the last day of trading for the December NYMEX Henry Hub contract, trading was light, but the news was heavy. The newest COVID-19 variant B.1.1.529, named by the World Health Organization (WHO) as the Omicron variant, was first reported to WHO from South Africa on November 24. By the time energy markets opened Friday morning after the Thanksgiving holiday, the Omicron fear had moved into the markets.

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Topics: Markets Natural Gas
3 min read

Natural Gas Paradigm Shift: A Domestic Commodity Goes Global

By 5 on November 30, 2021

The team at 5 has spent many months, complemented by countless charts, graphs, and blog posts, discussing the rising prices and volatility in the energy markets. When you spend so much time in the weeds, the bigger picture becomes cloudy. In this reflection, we step back to highlight the fundamental shift that has happened in the marketplace over the last year. Shifts of this magnitude do not happen often, perhaps once every ten years, and they need to be called out.

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Topics: Natural Gas Demand Response Sustainability Education Renewables
10 min read

November 2021 - Quarterly Market Letter

By Jon Moore on November 5, 2021

On behalf of the team at 5, I am pleased to forward our market letter for the third quarter of 2021. World leaders convened in Glasgow on October 31st to address international commitments to lower greenhouse gas emissions. The energy market welcomed these delegates with a complex set of conditions that frame the challenge posed by the transition to a clean energy economy. These include historically high natural gas prices and significant energy shortages in several markets that moved aggressively to decarbonize their electricity grids: UK, Germany, and California. At the same time, energy shortages in China may undercut decarbonization efforts of the world’s largest carbon emitter.

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Topics: Natural Gas Demand Response Sustainability Newsletters Education Renewables Resiliency
3 min read

LNG Exports: How much gas can we pass?

By 5 on October 28, 2021

Liquified Natural Gas (LNG) is produced through a process that super-cools pure methane gas to approximately -260ºF, which enables it to be stored in liquid form at normal atmospheric pressures and conveniently shipped overseas. Now that’s super cool in our book.

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Topics: Markets Natural Gas
3 min read

Gas Prices Surge on Foreign Demand

By 5 on September 30, 2021

Have you ever believed the energy market myth that natural gas prices are always cheaper during the fall and spring?

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Topics: Markets Natural Gas Demand Response Education
3 min read

How High Will Natural Gas Fly?

By 5 on August 31, 2021

There’s nothing like ending the month with a bang, which seems to be the trend for the settlement of the NYMEX Henry Hub prompt month natural gas contracts over the last three months. For most of August, the prompt trading month (September) was slowly churning lower, see Figure 1. By the middle of the month, prices even fell below the $3.90 to $4.10 per MMBtu trading range that was established in late July.

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Topics: Markets Natural Gas
4 min read

Gas Prices Vault Over Prior Lows

By 5 on July 30, 2021

Global natural gas markets are finally starting the rally that many producers had been anticipating in recent years. Last year, global demand for LNG dropped so precipitously that some LNG buyers elected to pay LNG liquidation terminals their contractually obligated tolling agreement payments and canceled their delivery of the actual commodity. Subsequently, last summer spot prices for the Japan/Korea Marker (JKM, the Asian LNG version of the Henry Hub natural gas trading hub in the US) traded below $3 per MMBtu. On July 28 of this year, the future contract for September LNG delivery was trading around $14.50 per MMBtu. Figure 1 shows that the JKM price for LNG has increased three-fold over the last year.

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Topics: Markets Natural Gas
12 min read

July 2021 - Quarterly Market Letter

By Jon Moore on July 20, 2021

On behalf of the team at 5, I am pleased to forward our market letter for the second quarter of 2021. The unusual weather that caused historic outages and extreme electricity and natural gas prices in Texas in Q1 surfaced in other markets in Q2. Both the Pacific Northwest and the Western US faced extreme weather conditions, namely, heat. In Death Valley, temperatures hit 130 degrees on July 9, a world record for the hottest reliably measured temperature in recorded history.

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Topics: Markets Natural Gas ERCOT Newsletters Education Resiliency