Producer Price Index August 2023 release

The BLS has released the July Producer Price Index Report.  (historical releases) 

The Producer Price Index for final demand increased 0.3 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in June and declined 0.3 percent in May. (See table A.) On an unadjusted basis, the index for final demand advanced 0.8 percent for the 12 months ended in July. 

In July, the increase in final demand prices was led by a 0.5-percent rise in the index for final demand services. Prices for final demand goods edged up 0.1 percent.

The rate of increases has somewhat slowed and selected areas are now trending downward. The PPI since start of Covid has risen 17.3%, compared to the CPI rise of 19.2%. (That is just two data points and should not be construed as any indication of some guaranteed future changes.)

Certainly improvement, but overall a "D" rating as for inflation outlook, imho. August would appear to have a further inflation uptick, from July's reports. 

Natural Gas Inventory Report, July 28, 2023

The Energy Information Administration released their weekly report yesterday.

The Pacific Region slipped to -8.3% from last week's -7.9% last week's numbers, although year ago numbers edged up to -13.1% from -13.4%

Across much of the West, prices increased this week, particularly in California. In the Rocky Mountain region, the price at Cheyenne Hub in southeast Wyoming rose 16 cents from $2.24/MMBtu last Wednesday to $2.40/MMBtu yesterday. In California, the price at PG&E Citygate in Northern California rose 40 cents, up from $4.89/MMBtu last Wednesday to $5.29/MMBtu yesterday. The price at SoCal Citygate in Southern California increased $6.69 from $5.64/MMBtu last Wednesday to $12.33/MMBtu yesterday.

Ouch!!

 Select inventories of EU and UK... 

It should be noted that while percent of capacity is high... that capacity is generally only about a 3 month supply. It is much better than years past, but still dependent on weather and geo-politics.

Total EU rose to 84.49%, from last week's 82.53%.

Snapshot of the past, the current and the future outlook for prices.

 

Natural Gas Inventory Report, July 21, 2023

The Energy Information Administration released their weekly report yesterday.

Nationally, the inventory number continue to stay above the 5 year seasonal average.

The Pacific Region continues to gain, with last week's numbers, at -7.9% vs. -9.3% of one year ago. The 5 year seasonal numbers continue to improve.

In California, the price at PG&E Citygate in Northern California rose 57 cents, up from $4.32/MMBtu last Wednesday to $4.89/MMBtu yesterday. The price at SoCal Citygate in Southern California increased $2.24 from $3.40/MMBtu last Wednesday to $5.64/MMBtu yesterday. Natural gas consumption in the electric power sector increased by 84% (1.3 Bcf/d) in California and by 10% (0.3 Bcf/d) in the desert Southwest this report week

 Select inventories of EU and UK... 

Total EU rose to 82.53%, from last week's 78.63%.

It should be noted that Gas in storage does not represent usage. An Example would be Germany has 212+ TWH in storage, but consumed approximately 847 TWH in 2022, which was a 17% decrease from 2021.

The following contains pricing information, that is based in Mmbtu and converted to US dollars for comparison purposes only. Forex is used for this comparison and should be noted that actual exchange rates on delivery may vary. 

Simply put... The EU and UK consumers do not use US Dollars, so be wary of these charts.

Snapshot of the past, the current and the future outlook for prices.

Just for comparison, the UK current pricing would suggest £1,522.06 per annum, while the 12 month high (FEB-24) would suggest £2,286.37. OFGEM has a cap around £2,047, which is line with the October futures.

Natural Gas Inventory Report, July 14, 2023

The Energy Information Administration released their weekly report yesterday.

Nationally, stocks continue to be above the mid point of 5 year range. However... once again the Pacific.

While the Pacific gained this past week, it only matched the curve for time of year.

Prices increased in most West Coast markets this week, except at SoCal Citygate in Southern California, where the price decreased 45 cents from $3.85/MMBtu last Wednesday to $3.40/MMBtu yesterday. Natural gas consumption in California declined 8% (0.4 Bcf/d) week over week, led by a 26% (0.5 Bcf/d) decrease in consumption in the electric power sector, according to data from S&P Global Commodity Insights. 

Select inventories of EU and UK... 

Total percent of capacity rose this past week to 80.76%.

The near term Natural Gas Prices for the EU and UK fell this past week. (Note: figures are in dollar terms and Mmbtu.)

Not surprisingly, the high 12 month also slipped. Currently that 12 month high is January, 2024.

Just for comparison, the UK current pricing would suggest £1,484.27 per annum, while the 12 month high (Jan-24) would suggest £2,235.81. OFGEM has a cap around £2,047, which is line with the October/November futures. (Note: The OFGEM cap reduction is more of a reduced consumption number, not so much as lower price per unit. Make of that, as you wish.)

While it could be said that EU and UK natural gas prices are skirting with levels not seen in 2 years, there is still angst in their markets. 

 

 

Producer Price Index July 2023 release for June Data.

The BLS has released the June Producer Price Index Report.  (historical releases) 

The Producer Price Index for final demand increased 0.1 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.4 percent in May and edged up 0.1 percent in April. (See table A.) On an unadjusted basis, the index for final demand advanced 0.1 percent for the 12 months ended in June. 

In June, the increase in final demand prices can be traced to a 0.2-percent rise in the index for final demand services. Prices for final demand goods were unchanged.

The index for final demand less foods, energy, and trade services moved up 0.1 percent in June after no change in May. For the 12 months ended in June, prices for final demand less foods, energy, and trade services advanced 2.6 percent.

The rate of increases has slowed and selected areas are now trending downward. The PPI since start of Covid has risen 17.8%, compared to the CPI rise of 18.3%. (That is just two data points and should not be construed as any indication of some guaranteed future changes.)

The downward trend continues...

Except...

The attention is now shifting to "services"..

Even this will likely resume falling by next month, as it is an annual rate. The montly stood flat, after two months of gains.

Still, a good report... IF the trend continues.

Natural Gas Inventory Report, July 07, 2023

The Energy Information Administration released their weekly report yesterday.

And as customary... the Pacific Region.

In California, prices declined week over week but remained elevated compared with other U.S. pricing hubs. The price at SoCal Citygate in Southern California decreased 98 cents from $4.83/MMBtu last Wednesday to $3.85/MMBtu yesterday. Consumption of natural gas in the electric power sector in California increased by 92% (1.0 Bcf/d) week over week, as temperatures increased. 

Select inventories of EU and UK... 

Yes, I am aware the capacity numbers change from time to time. Why... I don't know. If it troubles you... then you can figure it out.

While up in many area, the EU wide number slipped to 78.63%, from last week's 78.86%. Still remarkably high for the season. 

A brief look at the 12 month highs for futures... TTF (EU) and UKG (UK).

Showing an upward drift.

However, current week ending prices...

Snapshot of the past, the current and the future outlook for prices.

Just for comparison, the UK current pricing would suggest £1,578.22 per annum, while the 12 month high (Jan-24) would suggest £2,318.11. OFGEM has a cap around £2,047, which is line with the October futures.

It should be noted the OFGEM cap reduction was more of a reduced consumption number, not so much as lower price per unit. Make of that, as you wish.

Natural Gas Inventory Report, June 30, 2023

The Energy Information Administration released their weekly report yesterday.

As always... the Pacific Region...

Prices increased in all West Coast markets this report week. At PG&E Citygate in Northern California, the price rose 96 cents from $3.02/MMBtu last Wednesday to $3.98/MMBtu yesterday. The price at SoCal Citygate in Southern California increased 3 cents from $4.80/MMBtu last Wednesday to $4.83/MMBtu yesterday. The price at Sumas on the Canada-Washington border rose 59 cents from $2.02/MMBtu last Wednesday to $2.61/MMBtu yesterday.

Select inventories of EU and UK... 

Overall, very good, with EU wide numbers at 78.86% full.

A brief look at the 12 month highs for futures... TTF (EU) and UKG (UK).

A slight uptick for the 12 month, but still below the 5-5 picture. 

Current week ending prices...

Current futures (August v 12 month high)

Basically, the current futures are about where they were 2 years ago, when the EU was worried about Russia messing with natural gas deliveries and woefully inadequate natural gas stocks. 

Has the storm been weathered? 

Natural Gas Inventory Report, June 23, 2023

The Energy Information Administration released their weekly report yesterday.

As always... the focus is on the Pacific Region...

Along the West Coast, prices increased this week, in line with the Henry Hub, even as consumption in California declined slightly week over week. The price at PG&E Citygate in Northern California rose 16 cents, up from $2.86/MMBtu last Wednesday to $3.02/MMBtu yesterday, while in Southern California, the price at SoCal Citygate increased more than any other major hub this week, rising $1.67 from $3.13/MMBtu last Wednesday to $4.80/MMBtu yesterday.

Select inventories of EU and UK... 

Virtually all areas continue to increase NG in storage. Despite the hysteria, NG futures continue to ease, both nearby and 12 month... on the EU and UK market, with the Henry Hub, up slightly.

A brief look at the 12 month highs for futures... TTF (EU) and UKG (UK).

Recently, I have noticed some articles stating how the EU/UK natgas prices are surging and giving many reasons. Even one that was AI generated. 

Yet these hysterical articles don't seem to hold up for very long.

Surging... compared to what?

Natural Gas Inventory Report, June 16, 2023

The Energy Information Administration released their weekly report on yesterday.

Once again, let me focus on the Pacific Region...

Along the West Coast, prices decreased this week, but remain relatively high, particularly in California. The price at PG&E Citygate in Northern California fell 86 cents, down from $3.72/MMBtu last Wednesday to $2.86/MMBtu yesterday. The price at SoCal Citygate in Southern California decreased 16 cents from $3.29/MMBtu last Wednesday to $3.13/MMBtu yesterday. Consumption of natural gas in the electric power sector in California decreased by 7% (0.1 Bcf/d) week over week, as temperatures were relatively mild. In the Sacramento Area, temperatures averaged 68°F this week, leading to 12 fewer CDDs than last week, while in the Riverside Area, inland from Los Angeles, temperatures averaged 65°F this week, leading to 1 fewer HDD and 5 fewer CDDs than last week.

Select inventories of EU and UK...

Inventories continue to improve... over historic highs for this time of year.

NatGas Price chart...

The sky is falling...

The past 2 weeks have seen sudden spikes in EU and UK futures. This is being attributed to a host of things that have been known to take place. 

• The Dutch are shutting down the largest gas field in Europe.
• Norway is doing maintenance on their equipment.

Nevermind where the price was just 6 weeks ago. It reminds me of the gold bug syndrome. Time to talk of gloom and doom, to unload those holdings.

Until next week. 

Producer Price Index June 2023 release for May Data.

The BLS has released the April Producer Price Index Report.  (historical releases)

The Producer Price Index for final demand declined 0.3 percent in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.2 percent in April and fell 0.4 percent in March. On an unadjusted basis, the index for final demand moved up 1.1 percent for the 12 months ended in May.

In May, the decline in the final demand index can be traced to prices for final demand goods, which fell 1.6 percent. The index for final demand services increased 0.2 percent. 

Prices for final demand less foods, energy, and trade services were unchanged in May after inching up 0.1 percent in April. For the 12 months ended in May, the index for final demand less foods, energy, and trade services increased 2.8 percent. 

Overall, the trend is downward and some relief might be in sight for the consumer.

The decreased costs in unprocessed intermediate, have not completely moved into the processed area. Possibly by next month? 

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand fell 4.8 percent in May after increasing 1.6 percent in April. Almost 60 percent of the broad- based decrease is attributable to a 7.8-percent drop in prices for unprocessed energy materials. 

Nearly 60 percent of the May decline in the index for unprocessed goods for 

intermediate demand can be traced to prices for crude petroleum, which fell 10.2 percent.

The price drops all across the petroleum sector are evident in the report. Another big drop should be forthcoming in the report for June, as this sector peaked last June. 

After that, the impact of petroleum will decrease and the focus will shift elsewhere. As the saying goes... the low hanging fruit will have been picked by fall. 

When looking at the overall, as in the first graph and seeing it hold relatively steady, then realizing the significant drops in energy... sticky it is.