Cold weather and prior-day support from natural gas futures allowed natural gas cash point averages to rise a second consecutive day on Tuesday. However, as opposed to Monday's action when most points across the country rose between a couple of pennies to a little more than a dime, most increases on Tuesday for Wednesday delivery were between a dime and 16 cents.
Much like on Monday, cash points increased fairly steadily across most U.S. regions, with no real section of the country showing a larger hike in prices than another.
The spread between the Henry Hub and the screen came in a bit on Tuesday. According to IntercontinentalExchange, the Henry Hub average increased by 9.6 cents to $3.66, while December futures declined by 2.7 cents to $3.818 (see related story).
Citi Futures Perspective analyst Tim Evans said natural gas prices are receiving a boost from outages and the near-term temperature forecast. "The natural gas market continues to do its own thing, based on its own fundamentals and ignoring the macro trends in the wider commodity asset class," he said.
In futures, he said the "market is seeing some follow-through buying from Monday's rise, with this week's maintenance outage from the 500 MMcf/d Independence Hub sparking some buying and weather forecasts continuing to show some colder temperatures for the eastern U.S. in the 11- to 15-day forecast period to kick off the heating season."
Enterprise Products Partners spokesman Rick Rainey told NGI Monday that the hub had been flowing about 500 MMcf/d before it was shut down. He added that it is expected to start back up in the next couple of days (see Daily GPI, Nov. 16).
"NGPL-TexOk was a lot softer Tuesday than it has been," said a Midcontinent marketer, referring to the fact that some of the excess gas had been removed. "It looks like there is some gas going to the Gulf from the Midcontinent, possibly to offset the Independence Hub outage."
In the Midcontinent, the return of the seasonal chill helped take some extra gas out of the market on Tuesday. "It's gotten a little cooler in and around the Midcontinent. There was some industrial/power gen buying [Tuesday] morning, so it looks like they're back in the market after a stretch of mild temperatures," the marketer said. "That alleviated some of the supply constraints, where gas had been backed up for a bit.
"Prices were up a bit and we hope this will extend into Wednesday," he told NGI. "That said, no one is too concerned about the winter, especially because as a country, we're sitting on a lot of gas. We don't envision any big problem with supply going into the winter months, unless we get a really cold winter."
MDA EarthSat Weather said Tuesday in it's six- to 10-day forecast that a large cold mass of below-normal temperatures is expected to swoop south into the northern United States during days eight, nine and 10. According to the private forecasting service, by day 10 the entire country is expected to be experiencing normal to below-normal temperatures with the exception of the deep Southeast, which will see slightly above-normal readings.
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