08-31-2005, 07:12 PM
So do you guys think your customers will react badly to 25 cents for two minutes on the dryers? Gas prices are going out of sight this winter. This coming month there might even not be enough to go around depending on storm damage in the gulf. Have you raised prices yet - do you plan to?
09-01-2005, 02:17 AM
I am thinking of buying a laundromat in NY but am wondering what will happen to natural gas bill. Right now they say it's about $800 a month and the dryers are at 25 cents for 8 minutes. Now I'm wondering if I should buy it or not. Whats gonna happen in the future? Noone really knows!
09-01-2005, 04:23 PM
STOP ! Don't get in to the Business now.
Wait let them sit on it. Gas it WAY to high..
Stay away from the mat business.
The Laundromat business is on hold. Save you money we are SCREWED
09-01-2005, 04:47 PM
i dont believe that
laundry is a recession-proof business since everyone's gotta do their laundry somewhere.
I think there will be alot of good deals to be had by people getting into the business from owners of aging mats who dont want to remodel or deal with raising prices.
09-01-2005, 05:24 PM
Overview: Thursday, September 1 (next release 2:00 p.m. on September 8)
Natural gas spot and futures prices increased sharply this week (Wednesday-Wednesday, August 24-31), as Hurricane Katrina’s movement through the Gulf of Mexico region brought widespread evacuations of production facilities and an unknown amount of infrastructure damage. For the week, the spot price at the Henry Hub increased $2.70 per MMBtu to $12.70. At the New York Mercantile Exchange (NYMEX), final settlement for the September delivery contract occurred on Monday as Katrina hammered the Gulf Coast, causing a one-day increase of $1.055 per MMBtu to a final expiration price of $10.847. On the week, the price of the futures contract for October delivery at the Henry Hub moved approximately $1.45 per MMBtu higher to settle yesterday (Wednesday, August 31) at $11.472. Natural gas in storage was 2,633 Bcf as of Friday, August 26, which is 5.2 percent above the 5-year average inventory for the report week. The spot price for West Texas Intermediate (WTI) crude oil increased $1.53 per barrel or about 2 percent since last Wednesday to trade yesterday at $68.63 per barrel or $11.83 per MMBtu.
Hurricane Katrina’s destructive path through the Gulf of Mexico has taken a major portion of production in the Gulf off-line at least temporarily, causing prices to increase across the Lower 48 States. According to the Minerals Management Service (MMS), as of Wednesday, August 31, there was 8.35 Bcf per day of shut-in natural gas production for a cumulative total of about 34.19 Bcf taken off-line since last Friday. As a result, prices that were already elevated relative to historical norms moved even higher this week. Spot trading in natural gas was suspended at the Henry Hub on Monday owing to a shut-in of the hub from Sunday evening to mid day Monday caused by the storm, which made landfall at 6 a.m. on Monday. But on Tuesday, the price of spot gas at the Henry Hub was $2.49 per MMBtu higher than before Katrina in trading the previous Friday. For the week, the Henry Hub price is up $2.70 per MMBtu to $12.70, the highest price recorded at the hub since February 2003. (The NYMEX extended the delivery period of its August natural gas futures contract for one day, through September 1, 2005, owing to the temporary shutdown of the Henry Hub on August 28-29 resulting from Hurricane Katrina. All other contract terms remain unchanged.) Prices at other trading locations in Louisiana rose between $0.99 and $6.79 per MMBtu on the week, with the largest price increases for gas received on Florida Gas Transmission for transportation into Florida. The price shocks from the loss of Gulf supplies rippled throughout the country. In the Northeast, the average price increase on the week was $3.46 per MMBtu. The price on Transcontinental Gas Pipeline in the Mid-Atlantic region rose $4.54 per MMBtu to $14.88, the highest in the Northeast. While the return of the Palo Verde nuclear power station may have mitigated natural gas demand in the Southwest, hot temperatures and the lost supplies from Katrina held prices up in the West. On the week, the price at the Southern California border increased $1.55 per MMBtu, or 17 percent, to $10.07.
Hurricane Impacts. There is still considerable uncertainty as to the extent of infrastructure damage and the ultimate amount of lost production from Hurricane Katrina.
As of Wednesday, August 31, there were still 482 platforms and 79 rigs evacuated, down from a high of 645 platforms and 90 rigs the day before. Several companies such as Dominion and ExxonMobil have said inspections from flyovers have indicated only minor damage. Shell has reported topside damage to its Mars platform, which produces oil and natural gas. However, a full assessment of actual problems will not be available until a more thorough inspection of facilities is complete.
There are reports that Katrina may have damaged key natural gas processing facilities on the Gulf Coast, which could delay a recovery of gas supplies. Even if platforms and pipelines are either unaffected or readily restored to service, the gas generally cannot flow to market without treatment. Four plants may have been affected that have a combined capacity of 5.5 Bcf per day, which is the equivalent of slightly more than 10 percent of total national production.
Hurricane Katrina apparently has had little impact on receipts of liquefied natural gas (LNG) shipments at the LNG terminal at Lake Charles, Louisiana. Trunkline LNG, operator of the facility, had shut down operations for maintenance to accommodate expansion tie-ins. The facility was restored to active status ahead of schedule on Sunday. No shipments were scheduled to arrive at Lake Charles during the days affected by Katrina.
Price increases following Hurricane Katrina may be expected to attract a greater volume of LNG imports during the remainder of year. However, the possibility of greater LNG imports into the United States is limited by supply-side constraints in the Atlantic Basin. Trinidad and Tobago-based Atlantic LNG is the source of the largest share of U.S. imports of LNG, providing more than 70 percent of total LNG imports in 2004. Atlantic LNG has experienced an outage in the past month. Although one production train has been restored, one or both of the other two trains are still being worked on. Shipments from Nigeria are expected to grow in 2005 owing to an expansion at Bonny Island LNG facility. But Nigeria LNG Ltd, has temporarily limited production following a pipeline fire last week at the LNG plant.
**Owing to Hurricane Katrina, trading at the Henry Hub was suspended on August 29th.
The price of the NYMEX futures contract for September delivery gained over $1 per MMBtu on its final day of trading on Monday, August 29, to a monthly expiration price of $10.847 as Katrina made landfall on the Gulf Coast. The monthly settlement was a record-high final settlement price for a near-month contract and is $3.20 per MMBtu higher than the August 2005 settlement of $7.647. Meanwhile, the NYMEX contract for October delivery on the week gained a little under $1.45 to close at $11.472. Before declining by almost 19 cents per MMBtu yesterday, the October price on Tuesday reached a high of $11.659, the highest price recorded for a near-month contract. The NYMEX contract for January 2006 yesterday closed at $12.147, which is the highest price of any futures contract listed on the NYMEX but a significant discount to the current cash price of $12.70 at the Henry Hub. Since the previous Wednesday (August 24), the 12-month strip, which is the average of futures prices for the coming year, increased 81 cents per MMBtu to $10.606.
Recent Natural Gas Market Data
Estimated Average Wellhead Prices
Price ($ per Mcf)
Price ($ per MMBtu)
Note: Prices were converted from $ per Mcf to $ per MMBtu using an average heat content of 1,027 Btu per cubic foot as published in Table A4 of the Annual Energy Review 2002.
Source: Energy Information Administration, Office of Oil and Gas.
Working gas in storage was 2,633 Bcf as of August 26, according to EIA’s Weekly Natural Gas Storage Report, which is 5.2 percent above the 5-year average. Current stocks exceed the 5-year average by 130 Bcf. (See Storage Figure) This is a decline from the early-April difference of 227 Bcf, and total stocks are currently 111 Bcf below the maximum level of the previous 5 years. The implied net injection for the week was 58 Bcf, which is about 10 percent lower than the prior 5-year (2000-2004) average of 64 Bcf, and almost 29 percent less than last year’s injection for the report week. Temperatures during the report week, while still above normal for all Census divisions, represented a decline from the levels of the previous week (ended August 18), according to the latest cooling-degree-day (CDD) data from the National Weather Service. (See Temperature Maps) The largest declines in temperatures occurred in the Middle Atlantic and New England Census divisions. However, the highest temperatures and the greatest deviations from normal occurred in the southern regions from the Atlantic coast to the state of Arizona and in the Rocky Mountain region.
Other Market Trends:
EIA Releases Report on Offshore Legislation and Regulations: The Energy Information Administration released a new report providing a summary of legislation and regulations that affect natural gas and oil operations in the offshore regions of the United States. The report, titled “Overview of U.S. Legislation and Regulations Affecting Offshore Natural Gas and Oil Activity,” discusses the development of offshore regions over the past 50 years and the competing jurisdictional, environmental and economic issues that have helped shape several major laws and regulations during this time. In addition, the report discusses several current issues and presents data and examples to show why these regions are an important source of natural gas and oil in the United States. The offshore has accounted for about one-quarter of total U.S. natural gas production over the past two decades and almost 30 percent of total U.S. oil production in recent years.
Natural gas prices this week increased sharply as Hurricane Katrina devastated operations and impacted infrastructure on the Gulf Coast. Spot prices at Louisiana trading locations moved up an average of $3.23 per MMBtu, while prices in trading elsewhere across the country exhibited similar, albeit lesser, impacts from the storm. The price of the NYMEX futures contract for September delivery gained over $1 per MMBtu on its final day of trading on Monday, August 29, to a monthly expiration price of $10.847 as Katrina struck the Gulf Coast. The monthly settlement was a record-high final settlement price for a near-month contract and is $3.20 per MMBtu higher than the August 2005 settlement of $7.647.
Short-Term Energy Outlook
09-01-2005, 07:02 PM
Bring on the high prices for gas! This will help push out the mats that are undercapitalized, never should have been built and are already hurting /ubbthreads/images/graemlins/smirk.gif /ubbthreads/images/graemlins/tongue.gif. I will ride this out with my deep pockets.
09-01-2005, 11:58 PM
Hopefully it will be the end of the free dry mats anyway..