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Spring 2011  Issue 5
Welcome to Howell Energy Consulting  

Howell Energy Consulting brings you the opportunity to focus on the core mission of your business, while allowing an energy professional to create competition for your electricity and natural gas requirements through managed procurement.

Howell Energy Consulting is a licensed energy professional in Connecticut and Massachusetts. For more information :

phone: 860-205-3863
web site:


Energy Price Outlook  


Spring! Thank heavens! The winter was tough but now that it is over it is time to assess the lay of the land and begin to plan for the next energy procurement cycle.

The Economy
The job outlook continues improve. The national unemployment rate reported for March 2011 has fallen nearly a full percent since one year ago and is down 0.2% since the beginning of the year. Good news indeed but lately economists have become concerned with the impact on the economy of rising fuel and commodity prices.

At this time last year natural gas storage was 9.2% higher than the five year average. This year natural gas storage is only 0.6% higher than the five year average.  The winter has taken its toll on reserves and to add to this situation production is slowing. Reacting to skyrocketing oil prices producers have moved equipment from drilling for natural gas to oil.   For the week ending April 15th  Baker Hughes reports that the number of oil rigs increased by 20% while the number of natural gas rigs has declined by 9%.



The spring has a neutral impact on prices, although the occasional cold days can add a $.20/MMBtu (5%) to prices. Once the cold disappears the cold weather premium disappears.

Outlook and Buying Strategies:
While during this past March prices dropped slightly, spring prices have firmed as  supply has returned to a balance with consumption and also due to an improving economy. Soon prices may increase again as traders factor in a premium for the summer and the hurricane season.

The next opportunity for softening prices may be in September as the hurricane season winds down.  If the summer is not excessively hot, supply may build to the record levels seen during the past two years. A strong increase in reserves over the summer  could dampen price gains due to economic growth.

Possible strategies to get through the summer  include:

  • Think longer term to get out ahead of an economy that may begin to accelerate.
  • Purchase fixed products for the summer only, allowing an opportunity to view where prices may head this fall.
  • Return to utility service for the summer and get ready to jump into the market this fall.

To understand how these strategies apply to your business Call Howell Energy Consulting to to create a procurement plan for your organization.
About Derek Howell 

With over 30 years in the energy industry and 12 years of experience in the deregulated energy business, Derek Howell's expertise covers the broad expanse of the electricity and natural gas markets.  

Prior to the founding of Howell Energy Consulting. Mr. Howell  was Direct Energy's Director of Retail Pricing for  New England and New York regions. 


In This Issue
Energy Price Outlook
Hurricane Outlook
The EIA Short Term Outlook
Back to the Fundamentals

Hurricane Outlook:

File this under if it is not one thing it is another. WSI (Weather Services International) is forecasting hurricane activity similar to last year.  While that seems to be good news since not much hurricane damage occurred last year, the forecasters note that was a bit of luck. If the normal percentage of of hurricanes making landfall occurs (25%) then at least 2-3 hurricanes may make landfall this year. 

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The EIA Short Term Energy  Outlook


On April 12th the US Energy Information Administration released its Short Term Energy Outlook.  The EIA anticipates Henry Hub natural gas prices to increase by $.45/MMBtu in 2012 primarily due to slowing gas production and higher consumption particularly in the electric generation sector.


Let Howell Energy Consulting help you create a long run energy procurement plan.


Back to the Fundamentals!


Over the last quarter the focus has changed from the impact of massive excess supply to the fundamentals of energy price analysis. Through the remainder of the spring Howell Energy Consulting urges readers to be aware of reports on future economic growth and natural gas supply.  The wild card issue that could impact future prices is the review of the practices of firms drilling for natural gas in Pennsylvania and New York. Any significant finding that ground water has been impacted will have a chilling effect on the natural gas market.


If you are concerned about how potential EPA drilling standards could impact your business stay in touch with Howell Energy Consulting. Feel free to e-mail your questions or concerns to





To learn more about Howell Energy Consulting Go to:
Derek Howell
Howell EnergyConsulting LLC