Power and Storage Demand, Cool Weather Boost Prices
The cash market remained bullish Tuesday despite flagging support from energy futures. That was being replaced by moderate heating load starting to surface in northern market areas along with strong power generation demand and storage concerns in the West.
Price increases ranged from around a nickel to about 20 cents in Transco's Zone 6-NYC pool. The biggest development one Houston marketer saw was cooler autumn-like weather moving into the Northeast, causing citygates there to record Tuesday's biggest advances.
Another key price factor was unplanned outages occurring over the weekend at several major nuclear plants, the marketer said. That had utilities coming out to buy gas Monday and Tuesday for replacement power generation. He listed the Rockport plant in Ohio as the biggest outage, with those at the Calvert Cliffs and Limerick facilities (both PJM Interconnection) and Crystal River plant (Florida) as also significant.
Overall there's a lot of nuclear power down right now, the marketer continued, but that's nothing like what's coming up with a number of planned maintenance and/or refueling outages scheduled over the next month or so. "There will be about as many nukes down at one time as I can ever remember," he said. It didn't used to matter so much that nuclear facilities often planned their downtime for autumn because of generally mild weather and plentiful gas supplies, but that's not the case now, he said. "It's still pretty hot in the Southwest and gas is short."
Another Texas trader was in agreement, saying he was buying "tons of gas" to send west from Waha because of heat in California and the desert Southwest. Utility and storage demand also were pretty decent within Texas, which he attributed largely to high December and January pricing on the Nymex screen.
A Calgary source is looking for Southern California border prices to stay very strong through next month. "They've been hauling out of storage to beat the band for a long time due to hot weather and the El Paso break, and now there's not much time left to put that gas back into storage," she said.
By the way, it's Hurricane Florence now, but she is no threat to land anytime soon, the National Weather Service said. As of late yesterday afternoon, Florence was 330 miles south-southeast of Cape Hatteras National Seashore, NC, and moving slowly and erratically toward the northwest.
In addition, there were low-pressure areas in the western Caribbean Sea and western Gulf of Mexico that are encountering conditions favorable for development, NWS said.
©Copyright 2000 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.