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Platts Storage Outlook Conference
Written by Dr. Parsons   
Wednesday 16 January 2013

WTM Energy Software helped sponsor the 2013 Platts Storage Outlook Conference. WTM’s president, Dr. Cliff Parsons, spoke there on the premiums and discounts storage traders should be willing to accept for injecting and withdrawing optimally in the upcoming summer season.

In summary, traders at the start of the new storage season should be willing to pay as much as 18 cents over prompt to inject (or wait for a little higher than 18 cents over to withdraw and sell) for slow-cycle storage with low inventories and should hold out for 18 cents under prompt for slow-cycle with high inventories. Those same values for high-cycle are 2 cents over prompt and 12 cents under prompt, respectively.

The optimal capacity to buy and sell forward for hedging is in the 50% to 60% range of total capacity for lower inventories held on both slow and high-cycle storage. For higher inventories, the best hedge for both cycle-rates is to just sell forward the current inventories.

Last Updated ( Wednesday 16 January 2013 )

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