Post-weekend cash prices leaned chiefly toward the upside in a mixed performance Monday. A few scattered points in the East joined most western markets in mild softening, while the rest of the market ranged from flat to as much as about 30 cents higher in the Northeast. A majority of gains were less than a dime.
Traders didn’t expect the moderate overall rally to last into the September aftermarket, citing pipeline cash-outs and end-of-month balancing needs as significant contributors to Monday’s upticks. There was “some cooling demand in the market area” that helped push Dominion South Point nearly a dime higher, a producer said, adding that he also saw “good load” in Transco Zone 6. However, cold fronts will start reducing weather-related load as soon as Tuesday in both the Northeast and South, he said.
Swing quotes closed out August trading in the general vicinity of a dollar below first-of-month indexes. Intra-Alberta numbers took the biggest hit, winding up more than C$1.30 under index.
A Gulf Coast trader said that as soon as September futures had settled Friday at $5.082, “swing swaps started heading lower to around $5.” They got as low as $4.95 Monday morning, but had gone back up about a dime that afternoon, he noted. “A lot of end-of-month balancing” deals helped support prices, especially in the Gulf Coast, he said. But that will no longer be effective Tuesday, so he said he was looking for “a very bearish” initial aftermarket, especially since temperatures in the New York metropolitan area are due to get milder later this week.
A couple of sources agreed that little September business remained to be finished this week, with both having the perception that most bidweek deals had been wrapped up Friday. “But the price trend was down today [Monday] in what little was still being done,” said a Calgary-based producer.
A marketer noted that “it’s been really hard to move gas for September,” and it’s looking like swing prices will stay bearish in early September with little hot weather in the forecasts. “The only thing I can see that would rally prices anytime soon would be if Hurricane Frances gets into the Gulf of Mexico, but I think the weather people are expecting it to hit in the South Atlantic states.”
However, consulting firm Weather 2000 had this cautionary note Monday: “For those worried about a possible Gulf of Mexico entry, vector odds are high enough for this to remain a serious concern (as first-strike margins of error literally range from Havana to Jacksonville).”
Weather 2000 also commented that Tropical Storm Hermine had been named “exactly four weeks to the day after Alex was named, making this the first calendar month of August in the Atlantic to see eight named tropical storms develop. The previous record of eight named tropical storms for any calendar month was set just two years ago for September of 2002.”
Frances continued moving westward at nearly 14 mph Monday, and at 5 p.m. AST its center was about 220 miles east-northeast of the northern Leeward Islands (the northern half of the Lesser Antilles chain between Puerto Rico and Venezuela), according to the National Hurricane Center (NHC). Its tracking at that point would take the core of the hurricane north of the Leewards Monday night and Tuesday, NHC added.
Two tropical storms formed over the weekend, with neither having any impact on gas interests other than depressing power generation load along the southern Atlantic coast somewhat. The remains of Gaston moved into southeastern Virginia Monday, while Hermine headed north out at sea toward New England. Hermine was expected to become extratropical overnight.
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