Although not as strong as on the day before when gains across the board were nearly all in double digits, the cash market realized minor advances at a large majority of points Thursday. A small prior-day uptick of 2.8 cents by October futures provided a small amount of support, and there is evidence that recently heavy storage buying may be helping to keep cash quotes afloat.
However, weather-based demand remains rather meager in most regions.
Most points were flat to nearly 20 cents higher. The Rockies tended to see most of the larger increases. Most of the scattered declines were small in ranging from a couple of pennies to less than a dime, but Westcoast Station 2 was considerably outside the overall market trend in plummeting about C30 cents.
IntercontinentalExchange (ICE) found most points traded via its online platform ranging from flat to about 15 cents higher, but only a few locations rose by as much as a dime or more. Just as few saw small losses of up to a nickel, ICE said.
ICE reported that its volumes at the Chicago citygate, which was up a nickel or so, soared from 723,100 MMBtu in 113 transactions Tuesday to 910,900 MMBtu in 123 deals Wednesday.
Cash traders will have a little positive screen guidance again Thursday. Although up nearly a dime earlier in the day, the prompt-month futures contract turned in a near-repeat of the previous day's performance in rising another 2.9 cents Wednesday (see related story).
Cooling load is still elusive in Canada and much of the U.S. Although freezing lows in parts of Canada, especially Alberta, are creating a modicum of heating demand, it isn't cold enough in other regions to make up for the lack of heat. This is particularly true in the key Midwest and Northeast markets, where forecast Thursday highs are unlikely to make it above the low to mid 70s in most cases.
It's getting to sound like a broken record, but the desert Southwest area around Phoenix is the only one with really torrid conditions currently. The South continues to be warm but not hot, with peak temperatures on either side of 90 due Thursday.
The National Hurricane Center (NHC) expected Karl, which developed into a tropical storm Tuesday afternoon over the northwest Caribbean Sea, to weaken as it traversed Mexico's Yucatan Peninsula Wednesday, then reintensify Thursday or Friday after the storm center emerges into the Bay of Campeche.
Hurricane Igor still appeared to have a chance Wednesday to turn westward across the Bahamas and thread the needle between Cuba and the southern end of Florida into the Gulf of Mexico, but NHC continued to project north-northwest trackings for Igor and Hurricane Julia that would keep them out in the Atlantic away from the East Coast.
None of the systems was considered to pose a near-term problem for offshore production.
Price increases into Kern River and CIG of about a dime each may have been abetted by shortfalls and allocations Wednesday at the Opal Plant (see Transportation Notes), which likely caused some traders to scramble elsewhere for makeup Thursday supplies.
It appears that a rush to top off storage accounts earlier rather than later is developing as generally moderate weather is expected to hang around for a while longer. Following last Thursday's report of a 58 Bcf build, Credit Suisse analyst Teri Viswanath looks for the Energy Information Administration to estimate a considerably larger addition of 101 Bcf for the week ending Sept. 10. Ron Denhardt of Strategic Energy & Economic Research, Kyle Cooper of IAF Advisors and Stephen Smith of Stephen Smith Energy Associates weighed in with slightly smaller projections of 96 Bcf, 95 Bcf and 93 Bcf, respectively. Cooper said his estimate would exceed both the year-earlier and five-year average builds of 66 Bcf and 79 Bcf, respectively.
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