Today in Energy

The New York Mercantile Exchange (NYMEX) front-month futures contract for West Texas Intermediate (WTI), the most heavily used crude oil price benchmark in North America, saw its largest and swiftest decline ever on April 20, 2020, dropping as low as -$40.32 per barrel (b) during intraday trading before closing at -$37.63/b. Prices have since recovered, and even though the market event proved short-lived, the incident is useful for highlighting the interconnectedness of the wider North American crude oil market.

In the latest Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) forecasts that decreases in natural gas consumption in the United States in 2020 will be driven by declines in natural gas used in the industrial, commercial, and residential sectors. In the U.S. electric power sector, EIA forecasts natural gas consumption to decline in the second half of 2020 after growing in the first half of the year.

Actions to mitigate the 2019 novel coronavirus disease (COVID-19) have caused daily weekday electricity demand in New York City to decrease by 16% in April compared with expected demand, after accounting for seasonal temperature changes. However, decreases in the city's electricity demand have not occurred uniformly across the day. The largest differences between actual and expected demand have been during daytime weekday hours when many schools and businesses that normally would have been open are now closed.

In the past three years, the South Atlantic region of the United States installed more new utility-scale solar photovoltaic (PV) capacity than any other region of the country. States in the South Atlantic region installed 2.2 gigawatts (GW) of new solar capacity in 2019, more than double the 1.0 GW installed in California, which had the second-highest new solar capacity additions. Despite being home to the strong sun states of Arizona, New Mexico, and Nevada, at 0.9 GW, less solar capacity was installed in the rest of the West region in 2019 than in either the South Atlantic or in California.

Producers were operating the fewest oil and natural gas drilling rigs on record in the United States at 339 on May 12, the lowest level in the Baker Hughes Company's rig count data series that dates back to 1987. The number of active rigs began sharply decreasing in mid-March as crude oil prices fell: rigs have fallen by 56% (433 rigs) since March 17. Most of the decrease was in oil-focused geologic plays, but natural gas-focused plays also saw significant decreases.