4 min read

Domestic Natural Gas Production Rebounds

By 5 on January 27, 2022

What are the Drivers of Natural Gas Production and Pricing?

The dramatic changes in demand for many commodities over the past 24 months have wreaked havoc on supply chains across the world - energy markets are no exception. When demand for oil and gasoline tanked in the spring of 2020, oil prices fell to record lows, with near-term delivery prices even going negative. Natural gas prices did not fare much better, with spot prices during the summer and fall of 2020 setting new 25-year record lows. Producers of both oil and natural gas quickly reacted to those price signals, and production of both commodities began to drop as capital expenditures quickly ceased.

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Topics: Markets Natural Gas
11 min read

January 2022 - Quarterly Market Letter

By Jon Moore on January 25, 2022

“Few things will impact capital allocation decisions – and thereby the long-term value of your company – more than how effectively you navigate the global energy transition in the years ahead.”  - Larry Fink, Blackstone CEO Letter 2022

On behalf of the team at 5, I am pleased to forward our market letter for the fourth quarter of 2021. This letter continues our focus on the conflict between regulations that promote low carbon energy production, and the strain that this energy transition puts on utility systems that must: (i) accommodate intermittent energy sources, and (ii) ensure reliable electric supply at a reasonable cost. California and Europe have taken aggressive regulatory action to reduce carbon emissions. Perhaps because of their early mover status, these markets are also good examples of the challenge faced by regulators overseeing the energy transition.

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Topics: Natural Gas Demand Response Sustainability Newsletters Education Renewables Resiliency
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