December natural gas is expected to open 4 cents higher Thursday morning at $2.93 as weather models suggest a pattern leading to additional cold. Overnight oil markets were mixed.
The days of price spikes at the Algonquin Citygate may be numbered. Wednesday the first volumes from the Atlantic Bridge expansion project flowed onto Algonquin pipeline and the price impact was enormous. "From a price perspective, with the maintenance work over and the partial addition of Atlantic Bridge resulted in a $1.16 fall in the AGT cash price between Oct 31 and Nov 1,” noted EnergyGPS in a morning note to clients.
"When the 0.0927 Bcf/d of additional capacity does come online, we will look for another price drop as AGT converges toward Marcellus production. Moving further into the winter, Algonquin looks especially bearish. The increase of 0.45 Bcf /d from both AIM (Algonquin Incremental Market project) and Atlantic Bridge will expand the capacity available for power burns. While we have not seen strong res/com pulls since AIM was put into service, the total additional capacity from both these projects should drastically reduce bottlenecks along the pipe."
The 10:30 a.m. EDT release of storage figures from the Energy Information Administration (EIA) should give traders an idea what season-ending supply might look like. Storage now stands at 3,710 Bcf and the thinking is that limited heating loads near-term could take the final storage total close to the record 4,047 Bcf seen last year before withdrawals begin in earnest.
Last year 56 Bcf was injected and the five-year pace stands at 60 Bcf. Citi Futures Perspective is looking for a 52 Bcf increase and Raymond James calculates a 70 Bcf build. A Reuters survey of 26 traders and analysts resulted in an average 62 Bcf with a range from 45 Bcf to 71 Bcf.
In overnight Globex trading December crude oil fell 8 cents to $54.22/bbl and December RBOB gasoline gained fractionally to $1.7460/gal.