Prices were flat to a little more than 20 cents higher at all points Wednesday as scattered increases in cooling load combined with a few remaining areas of chilly weather, primarily in the Northeast, Rockies and Western Canada, along with the previous day's modest 2.2-cent futures increase, to boost the cash market.
However, overall weather fundamentals remained slightly bearish for the most part as summertime heat levels remained missing in action outside the desert Southwest and low temperatures were only rarely forecast to get below the 40s Thursday.
Other than most of the smallest increases occurring in the Midcontinent and California, gains were spread fairly evenly across geographic market areas.
One source suggested that end-of-month balancing demand may have had more to do with Wednesday's firmness than weather-based buying.
Henry Hub, which rose about 15 cents, saw a Wednesday increase of volumes traded on IntercontinentalExchange (ICE) of 346,000 MMBtu/d to 1,263,700 MMBtu/d from Tuesday's level. Columbia Gas, also up about 15 cents, saw a similarly large increase in ICE trading activity of 313,200 MMBtu/d to 748,500 MMBtu/d.
Less than two months into the traditional seven-month storage injection season, Southern Natural Gas says it is nearly three-fourths full at its two facilities in Louisiana and Mississippi. A bulletin board posting said that as of last Thursday total inventories of 43.9 Bcf represented 73% of the company's maximum working gas capacity of 60 Bcf. The latest volume compares with 30.6 Bcf (51%) on May 22, 2008 and 39.4 Bcf (66%) on May 24, 2007, Southern said.
A low-pressure system approaching from the Midwest will keep the Northeast cloudy, cool and rainy Thursday, according to The Weather Channel (TWC). A cold front Friday will ensure that some heating load stays around. Another cold front will also keep cool conditions going in the Midwest, TWC said, although heating load is expected to remain relatively modest.
Meanwhile, the South is seeing a mix of temperature trends, such as warming in locations such as Atlanta and cooling more toward the central part of the region. The bottom line was that other than highs in the 90s in parts of South Texas, the overall South still has not begun to see typical summer air conditioning load yet.
Most of the West will be dry and warm to hot Thursday and Friday as high pressure dominates the region, TWC said.
A utility buyer in the South said it was cooling a bit in his area. It's the end of May and people are anxious to get into local swimming pools, but for some the water is still a little cooler than they'd like. The buyer said he was getting cut about 15% on scheduled Panhandle Eastern volumes due to pipeline constraints.
The buyer said he did June baseload purchases into TGT Zone 1 at index flat and into Trunkline zone 1A (northwest Louisiana) at basis of minus 6 cents. He said the utility should be about 57% full on storage by the end of May and expects to have its accounts full by August.
Citi Futures Perspective analyst Tim Evans said he expects a storage injection of 115 Bcf to be reported for the week ending May 22, to be followed by injections of 125 Bcf each in the weeks ending May 29 and June 5. Stephen Smith of Stephen Smith Energy Associates estimated a 109 Bcf injection for the week ending May 22, saying that was up slightly from a prior expectation of 107 Bcf (see related story). Cameron Horowitz of SunTrust Robinson Humphrey was projecting a 120 Bcf build for last week.
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.