Bored on a Saturday Night

There is nothing on television worth watching, and the news is to be avoided. I have completed all my chores for the week and looking for something to do.

So, allow me to jabber about stuff, I know very little about... and prove to you how little I know.

As the EIA seems to be having difficulty with this past week’s reports… I am shooting in the dark, even more so than usual.

The futures market indicates UK natural gas prices will likely double from current, while the Dutch seems to believe in consistency, going into January of 2023. It strikes me odd, as the Dutch and UK futures had remained rather consistent until about a month ago.

I cannot quite understand why, but last fall, the topic of storage was in the news, and I do seem to recall the U.K. had divested itself of most of their NG storage capacity. . It likely was due to long range planning away from fossil fuels.

That's okay, as it is their business. My concern is the prices in the U.S. While prices have doubled and then some, the futures market seems to hold steady where we currently are. Naturally, the doubling of price of Natural Gas on the market does not translate to doubling of price to the end user, but $3.50+ per MBTU will. 

That adds up to about $20 a month more for the average American Household and it is important to remember... only about half of American households use Natural Gas, so about $40 more per month. BUT, most of those households rely disproportionately on Natural Gas in the colder months. 

Likely most Americans have adjusted. Nearly all of us use Electricity and about 40% of that comes from Natural Gas.

The problem will be when the Freeport company is back up to 100%. The problem with the chart above, is it omits the runup to over $9.30 per MBTU just prior to the fire at Freeport. Freeport accounts for about 17% of LNG exports. That fire caused a major disruption for exports, which reduced the draw on our own inventory. 

Freeport states they should be partially up and running in 90 days and at full capacity by end of the year. It is not a stretch to think U.S. natural gas prices will near the $10 per MBTU by then. 

Just double the above numbers and you can see the problem.

On the good news, the gasoline futures have slid 44¢ from their peak on June 6th. Gasoline at the pump always rockets upward, but fall like a feather. That price should continue to fall another 17¢, unless something else happens. If you are wondering about a discrepancy, rest assured the gasoline was on pace to hit $5.20 at the pump and then the bottom suddenly fell out. Something about bad economic news.

There was a bit of concern about some Canadian Model's itinerary, but the Canadian Model appears to have changed her mind. 

That wraps it for me, as this is started to be boring. Oh wait, maybe there is something on the streaming services, that I would be interested in, AND haven't seen a dozen times.😀