Surplus

Don’t be fooled by the 227 Bcf (22%) gas storage surplus compared to the five-year average of working gas levels, analysts at Raymond James & Associates warned in an equity research note on Monday. The gas market is tighter than those numbers would suggest and the “weather-disguised tightness should begin to show up soon.”

A tightening squeeze by high fuel prices and a regional surplus of generating capacity is pushing Alberta toward adding electricity to its traditional product lines of natural gas and oil as Canada’s principal energy exporting jurisdiction.

While surplus capacity in the Midwest is likely to continue the trend of low wholesale power prices in the region for the next several years, those prices will likely see a sharp upward turn by 2007 as excess capacity starts to be worked off, a new report issued last Tuesday by Henwood concludes.

The Northeast moved a step closer to getting a major new power transmission line, linking surplus generation in Maine and Atlantic Canada with rapidly growing demand in Boston, New York and the Mid Atlantic region. FERC last Wednesday conditionally approved the transmission project filed by Neptune Regional Transmission System LLC consisting of several thousand miles of undersea high-voltage direct transmission. Among other things, the Commission said that its approval was contingent upon Neptune joining the Northeastern regional transmission organization (RTO).

Traders sweating out the warm winter and wondering how they’regoing to get rid of surplus storage can take heart from a newanalysts report that sees 27,000 MW of natural gas-fired powergeneration capacity being added in the next 12 months.

Traders sweating out the warm winter and wondering how they’regoing to get rid of surplus storage can take heart from a newanalysts report that sees 27,000 MW of natural gas-fired powergeneration capacity being added in the next 12 months.