How to Use This Report

Energy Statistics at a Glance Section

The Energy Statistics at a Glance page provides a quick look at the trends of some key industry statistics.  They are described below:

• Rig Count:  The total (oil plus gas) rig count is shown in the chart.  The rig count should rise or stablize while energy prices are high.  The Canadian rig count is cyclical because much of their drilling is done in the winter when the ground is frozen.
• Natural Gas Prices:  The Henry Hub Cash Price is the price of natural gas delivered the next day at the Henry Hub, LA.  The NYMEX Price is the price of natural gas delivered in future months at the Henry Hub, LA.  The Henry Hub Strip is a plot of the price for delivery in each of the next 36 months.  The “humps” in the curve reflects the seasonally high prices during the winter.
• Natural Gas Storage:  Natural gas demand is seasonal, but supply is relatively steady.  As a result, natural gas is stored during the summer and withdrawn during the winter.  The weekly injections and withdrawals as well as the actual inventory levels for the U.S. and Canada are shown.  Deviations from normal can cause significant price movements.
• Imports:  Because the U.S. consumes more natural gas than it produces, imports are required to balance the market.  The largest imports are delivered via pipelines from Canada.  The other source of imports is LNG from ships.  LNG will grow in importance in the future because very little, if any, growth is expected from either U.S. or Canadian supplies.
• Petroleum Inventories:  Crude, distillate and gasoline inventories are tracked.  As with natural gas, deviations from normal inventory levels can move the market.  Crude inventories are always shown, but distillate inventories are shown in the winter and gasoline inventories are shown during non-winter months.
• Petroleum Prices:  NYMEX WTI crude, heating oil and residual oil prices are compared with natural gas prices (expressed in $/Bbl).  The natural gas comparison is shown because when it is higher than residual oil or heating oil, those petroleum products are substituted to some extent for natural gas.  As a result, natural gas prices tend to stay between heating oil and residual oil prices unless there is an unusually strong imbalance in supply and demand for natural gas.
• Degree-days:  Heating degree-days are shown in the winter and cooling degree-days are shown in other months.  Degree-days are referenced to 65 degrees Fahrenheit.  For example, if the high temperature is 70 degrees and the low temperature is 50 degrees, the average temperature is 60 degrees.  The difference between 60 degrees and 65 degrees is 5 heating degree-days.  If the average temperature was 75 degrees, then there would be 10 cooling degree-days.  The National Weather Service performs this calculation for cities across the country, weights the values according to population and then accumulates the values for the week.  Deviations in temperatures from normal will affect the amount of natural gas used.
• Temperature Outlook:  The National Weather Service publishes a 6- to 10-day and an 8- to 14-day temperature forecast.  The forecasts are compared to normal temperatures for the dates of the forecasts.  Red areas on the map indicate warmer-than-normal temperatures and blue areas indicate colder-than-normal temperatures.  In the winter, warmer-than-normal temperatures (especially in the Midwest and Northeast) indicate lower-than-normal natural gas usage for space heating.  In the summer, colder-than-normal temperatures in the Eastern half of the country indicates less-than-normal natural gas usage to generate electricity.
• Electricity Generation:  Natural gas usage for power generation has been growing.  Power generation peaks in the summer and winter.  When weekly power generation in the winter and summer exceed the prior year, natural gas usage will probably be higher.
• U.S. Exchange Rate:  The U.S. exchange rate from 7 major currencies and 27 broad currencies are indexed to the exchange rate as of January 2002.  The reason for the indexing is that the value of the dollar began to fall in early 2000.  The exchange rate is important because Apache’s expenses in many countries are paid in local dollars.  Also, a falling dollar is believed to generate upward pricing pressure on crude oil because producing countries need to raise the price of crude (valued in U.S. dollars) to maintain their purchasing power.
• U.S. Treasury Yields:  The interest rates for the 2-year and 10-year Treasury notes are plotted.  Rising interest rates increase the cost of borrowing for businesses and consumers, which can negatively impact general economic growth.  When short-term interest rates rise above long-term interest rates, some economists believe that it is a signal that the economy could be slowing down or could be headed into a recession.