The market faltered at the finish line of trying to achieve a full week of advancing prices at essentially all points. In spite of rising weekend temperatures in the Midwest, the previous day’s dive of 29.9 cents by September futures following a report of an above-expectations storage injection was able to induce double-digit declines at all but one point Friday. The typical weekend fallback of industrial load was an additional, albeit minor, bearish factor.
The cash market recorded decreases ranging from about a dime to nearly 35 cents. The Midcontinent and Texas markets tended to see most of the larger drops as cooling load, while still fairly strong, was starting to recede somewhat in those areas.
Monday’s cash trading will again have negative screen guidance after September futures softened by another 6.9 cents Friday (see related story).
After spending the first half of last week under relatively moderate conditions, the Midwest was predicted to see a weekend warmup that would take highs to the 90 area in the Chicago area and to the mid 90s farther west in Des Moines, IA. The Northeast will resume a cooling trend after seeing a brief rebound of temperatures Friday, with Saturday highs falling to around 80 in New York City and the mid 70s in Boston.
Normal summertime heat has almost completely reasserted itself across the South, with peak temperatures in the low to mid 90s common from Texas-Oklahoma through the South Atlantic coast. Although it had lost its price-supporting ability, an Overage Alert Day got extended through at least Friday by Florida Gas Transmission because of continuing forecasts of mid 90s readings in its Florida market area.
A return of 90s highs in inland California and rising mercury levels in Western Canada were about the only changes of any note in the overall western forecast. Otherwise the forecast was largely static again: very hot in the desert Southwest, warmer than usual in the Rockies and mild to cool along the California coast and in the Pacific Northwest.
El Paso reported high system linepack Friday.
Enterprise Products Partners said Friday it might be able to restore some of the 240-250 MMcf/d in flow shut in on its High Island Offshore System after a late Tuesday explosion and compressor fire at its High Island 264 processing platform, but the company was still awaiting federal approval for a platform bypass plan (see related story).
Meanwhile, another chunk of Gulf Coast supply was suspended last week as operator Anadarko said it began scheduled maintenance on the giant offshore Independence Hub facility that is expected to run through the end of the third quarter 2009. Recent Independence production has been about 900 MMcf/d, but Anadarko said it expected the maintenance to reduce natural gas volumes by 150-250 MMcf/d, “gross, on any given day from previous run-rate levels.”
“People were just not buying today [Friday],” lamented a Midcontinent producer, who said he had to take a loss on some purchased gas that he had expected to resell more easily. He also reported getting cut for intraday flows on Panhandle Eastern and said it was hard to get rid of the gas being returned. The forecasts were for hotter temperatures during the weekend in the Midcontinent and Midwest, he said, but there was still not enough power generation load to support the market.
The producer said he doesn’t see any new rallies in store this week despite predictions of above-normal temperatures in much of the eastern United States.
He noted that basis spreads among many pipes in the East “have almost disappeared” as a result of the new capacity being provided by Rockies Express-East and Midcontinent Express. The NGPL TexOK premium over NGPL’s Midcontinent zone had been about a dollar year ago, and now its down to about 15 cents.
Despite five rigs leaving the U.S. search for natural gas in the Gulf of Mexico during the week ending Aug. 7, an onshore addition of nine made it four weeks in a row in which a moderate gain has defied this year’s overall trend of a declining number of active gas rigs, according to the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/). The latest tally of 681 was up 1% from a month ago but 57% less than the year-ago level, Baker Hughes said. The oil rig count registered an even larger gain of 16 to 277, it added.
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