NEI's Energy Markets Report - February 4-February 8, 2008

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

Electricity peak prices fell $0.09-$7/MWh at the Entergy, NEPOOL, PJM West and SP 15 hubs. The ERCOT and Palo Verde hubs increased $4-7/MWh. EIA projects summer weather will be milder, resulting in about 10 percent lower cooling-degree-days and less power demand for air conditioning. This is expected to lower the growth in residential electricity sales (EIA STEO, see pages 1, 2, 3 and 5).

Gas prices at the Henry Hub decreased $0.06 to $7.89/MMBtu. The Henry Hub spot price is expected to average $8.18 per mcf during the first quarter of 2008 compared to $7.41 during the corresponding period in 2007. Total natural gas consumption is expected to increase by 0.9 percent in 2008 and by 1.0 percent in 2009 (EIA STEO, see pages 1, 2, 3 and 5).

Estimated nuclear plant availability fell to 89 percent last week. Two units began refueling outages, Hatch 1 and La Salle 1, and Clinton completed its refueling outage. D.C. Cook 1 was manually tripped due to high vibrations on turbine bearings. Diablo Canyon 2 was down for a planned maintenance outage. Davis-Besse was ramping up to full power from a refueling outage when it had to shut down to rebalance the plant’s generator. Peach Bottom 3 shut down to repair a safety relief valve (Platts and NRC, see pages 2 and 4).

Crude oil prices increased $1.73 from the previous week to $91.41/barrel. Over the next two years, higher production outside of the Organization of the Petroleum Exporting Countries (OPEC) and planned additions to OPEC capacity should more than offset expected moderate world oil demand growth and relieve some of the tightness in the market. The West Texas Intermediate (WTI) price, which averaged $72 per barrel in 2007, is expected to average about $86 per barrel in 2008 and $82 in 2009 (EIA STEO, see pages 1 and 3).

By 2012, the following amounts of new generating capacity are expected to come online: 42,000 MW of coal; 57,000 MW of natural gas; and 40,000 MW of wind (see page 5).

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