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May 2022 —

Energy News

The Russian invasion of Ukraine has caused extensive volatility in the global energy markets. As the global community binds together to place sanctions on Russia, the crisis is showing how important U.S. oil and natural gas production is to global energy security.

WHY IS THIS CONFLICT IMPACTING DOMESTIC NATURAL GAS PRICES?
Russia’s invasion of Ukraine and the subsequent sanctions placed on Russia by the global community has caused a dramatic shift in global energy supply and demand. 

Russia* is the third-largest producer of oil, producing 11 percent of global production. Although the U.S. leads with 20 percent of the global share, many countries in Europe have been reliant on Russia for their energy needs. Last year, for instance, Russia provided the European Union with 31 percent of its natural gas. (*as reported by the Energy Information Administration) 

As sanctions and the banning of Russian imports continue to grow, liquified natural gas from the U.S. will become an increasingly reliable source of energy for Europe. 

Liquified natural gas (LNG) is natural gas that has been cooled to a liquid state for storage and shipping for exports around the world. Since the United States started exporting LNG in 2016, it has quickly expanded its capacity to become the world’s largest exporter in 2022.  

However, this capacity does not yet meet the current global demand.  

As the U.S. ramps up its production of LNG for export, U.S. consumers are now competing for natural gas on the global stage. While the continued growth in LNG exports is a benefit to U.S. natural gas producers and helps bring energy security around the world, it does make the U.S. consumer vulnerable to geopolitical events. As global demand for U.S. LNG continues to grow, prices will be elevated until sufficient supply can be generated.  

IS PRODUCTION INCREASING TO MEET DEMAND?
Yes, production of oil and natural gas is continuing to increase to help meet demand. According to the EIA's Natural Gas Weekly Update on May 19, 2022, natural gas rigs are up 49 percent from this time last year.  Although production is near pre-pandemic levels, the U.S. natural gas storage is 15 percent below the five-year average at 1.732 trillion cubic feet (Tcf).

In an effort to combat higher energy prices and further increase production, in April the Biden administration resumed selling leases to drill for oil and gas on federal land.

As always, if you have any questions regarding this information, please reach out to your local  WoodRiver Energy consultant.

Market Data – May 2022

Weekly Natural Gas Storage (Values listed in Bcf)
Region
East
Midwest
Mountain
Pacific
South Central
Total
5/13/22
296
364
103
187
781
1,732
5/13/21
356
470
134
245
884
2,090
net change
-16.9
-22.6
-23.1
-23.7
-11.7
-9.3
Information provided by: https://ir.eia.gov/ngs/ngs.html
CME (Henry Hub) Natural Gas Futures (Values listed in dekatherms) 
Date
5/17/22
4/4/22
3/7/22
2/8/22
1/11/22
12/7/21
11/5/21
10/4/21
9/13/21
8/13/21
7/6/21
Price
$8.26
$5.72
$4.93
$4.30
$4.16
$3.60
$5.33
$5.80
$5.21
$3.95
$3.68
https://www.eia.gov/dnav/ng/hist/rngwhhdD.htm
Utility Costs of Gas (Values listed in dekatherms)
Month
May '22
April '22
March '22
February '22
January '22
December '21
November '21
October '21
September '21
August '21
July '21
June '21
Mid American - IA
$9.16
$9.81
$9.29
$9.25
$9.36
$9.76
$9.67
$9.25
$7.99
$7.53
$7.11
$6.35
Alliant - IA
$6.34
$5.56
$6.62
$8.01
$8.01
$8.08
$8.69
$8.60
$7.27
$7.14
$6.85
$6.42
Black Hills - IA
$5.50
$6.78
$6.78
$6.86
$7.10
$6.27
$6.49
$6.69
$5.51
$5.06
$4.94
$4.97
Black Hills - NE
$6.69
$6.03
$5.53
$5.95
$6.83
$6.08
$6.54
$6.81
$5.64
$5.30
$4.80
$4.40
Xcel Small Volume
$5.27
$5.27
$4.93
$4.93
$4.93
$5.31
$5.31
$5.31
$4.11
$4.11
$4.11
$3.38
Xcel Large Volume
$5.22
$5.22
$4.87
$4.87
$4.87
$5.25
$5.25
$5.25
$4.06
$4.06
$4.06
$3.27
Kansas Gas Service
$8.61
$8.22
$8.35
$7.58
$7.46
$7.49
$6.46
$6.22
$5.85
$5.55
$5.11
-$5.08
Midwest Energy
$7.90
$7.03
$8.43
$7.96
$7.64
$8.19
$7.65
$6.54
$6.23
$5.86
$5.38
NA
Local First of the Month Markets (Values listed in dekatherms)
Month
May
April
March
February
January
December
November
October
September
August
July
June
NNG Ventura
$6.87
$4.83
$4.52
$6.02
$7.21
$5.50
$5.95
$5.44
$74.01
$3.76
$3.41
$2.74
Chicago Citygates
$7.11
$5.10
$4.53
$7.02
$5.68
$5.62
$6.29
$5.70
$4.22
$3.89
$3.46
$2.85
Colorado Interstate Gas
$6.13
$4.84
$4.35
$4.77
$5.39
$4.91
$4.57
$4.79
$3.67
$3.78
$3.16
$2.67
SouthernStar
$6.65
$4.77
$4.41
$6.68
$5.95
$5.59
$5.96
$5.58
$4.00
$3.78
$3.48
$2.83
Pandandle (PEPL)
$6.62
$4.76
$4.62
$6.58
$5.38
$5.42
$6.01
$5.40
$3.96
$3.72
$3.33
$2.76
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