NEI's Energy Markets Report - February 18-February 22, 2008

Here's a summary of what went on in the energy markets last week:

Electricity peak prices increased $3-9/MWh at all hubs except NEPOOL. The NEPOOL hub decreased $1/MWh (Platts, see pages 1 and 3).

Estimated nuclear plant availability rose to 93 percent last week. Grand Gulf 1 was the only unit to shut down last week (see pages 2 and 4).

Uranium prices were $75 and $73/lb U3O8 according to TradeTech and UxConsulting (see pages 1 and 3).

Gas prices at the Henry Hub increased $0.49 to $8.83/MMBtu due to frigid temperatures in the Midwest and Northeast. Henry Hub gas futures for one-month, six-month, and twelve-months ahead traded at or above $9/MMBtu. Low imports of liquefied natural gas to the lower 48 states are a factor in the recent increase in gas prices. LNG imports have averaged less than 1 Bcf per day this winter compared to more than 3 Bcf at times last summer. The EIA reports that the reduction in U.S. LNG imports reflects changes in LNG supply and demand across the world. For example, Japan, which is the largest importer of LNG in the world, last year experienced a massive earthquake that resulted in the shutdown of seven nuclear reactors. As a result, Japan is now relying more on LNG as a fuel for electric power generation. Some countries in Asia and Europe rely on LNG imports as a primary source of natural gas, resulting in a willingness at times to pay prices exceeding those in U.S. markets in order to have LNG cargos diverted to meet their demand requirements (EIA, see pages 1, 2 and 3).

Crude oil prices increased $5.05 from the previous week to $94.13/barrel. Crude oil futures for March 2008 traded $6 higher than last week at $100.38/barrel. EIA has claimed the high prices of crude oil are due to supply and demand fundamentals. However, other analysts suggest that $30 to $40 of the current market price for a barrel of oil is a result of speculative investing from banks and hedge funds (see pages 1 and 3).

For the report click here. It is also located on NEI's Financial Center webpage.