A couple of instances of flat numbers in the Northeast were conspicuous amid an overall softening Thursday. Weak fundamental weather support and falling energy futures Wednesday and Thursday prompted losses ranging from a little less than a nickel to 15 cents or so, with most declines weighing in at a dime or more.
It’s hardly surprising that small warming trends in some regions at midweek were unable to sustain Wednesday’s moderate rally. A look at NGI‘s NRC Power Reactor Status Report (https://intelligencepress.com/subscribers/power/nrc/) shows that virtually all of the U.S. nuclear fleet is at or near 100% operation.
A bearish storage report and a subsequent dime-plus screen drop, coupled with expected lessening of cooling demand and the typical drop in industrial load over a weekend, are expected to keep prices on a downhill slope Friday.
The Energy Information Administration said 84 Bcf was injected into storage during the week ended Aug. 20, handily surpassing the year-earlier (53 Bcf) and five-year average (55 Bcf) builds. One source found it especially interesting that if EIA hadn’t subtracted the loss of 6 Bcf to fire at Duke Energy’s Moss Bluff facility northeast of Houston, it would have been reporting a 90 Bcf injection, “which would have been really huge” compared to past volumes this late in the injection season.
The storage issue is looming ever larger as a potential market-crusher in the next month or so. Anecdotal evidence includes Sonat barring interruptible injections starting Friday (see Transportation Notes); it joins Northern Natural Gas, which took similar action earlier this week. And although the traditional end of refill season is regarded as Oct. 31, Northwest reminded customers that they are required to have their accounts 100% full by the end of November. As if to pile on the negative news, Texas Eastern announced late Thursday afternoon its own injection restrictions for the Aug. 28-29 weekend.
A marketer said injections by Peoples Energy in Chicago and NGPL have slowed to a near-standstill recently. “There’s so little weather load lately that a lot of gas being traded is going into storage now, but that can’t last much longer,” he said. He sees a big price crunch coming sometime in September or maybe early October when the storage facilities start topping off and there’s even less summer heat than now.
The South will remain hot and humid for the most part through the weekend and the Northeast will be warming up into the 80s Friday, The Weather Channel said. However, a cold front is expected in the Midwest this weekend, while the West Coast will be warming up with highs around 100 degrees in California’s Central Valley by Sunday, it added.
Frances became the fourth hurricane of the 2004 Atlantic season Thursday after having graduated from tropical depression to tropical storm status in the previous afternoon. Its remote location about 1,005 miles east of the Lesser Antilles at 5 p.m. EDT Thursday means Frances will remain a nonfactor in the gas market for at least this week. Moving toward the west-northwest at nearly 16 mph, the storm was expected to continue that general motion but gradually decrease speed Thursday night and Friday, according to the National Hurricane Center.
Ah, the vagaries of linepack. Earlier this week Kern River was reporting high linepack again in its farthest downstream segment after having gotten levels to normal in all four segments in the previous week. As of Thursday Kern River said linepack was LOW in the downstream segment while remaining normal in the other three.
A Northeast utility buyer reported that “we actually had a lot of people coming to us today looking for delivered Transco,” so it was hard to see why Zone 6 quotes fell more than a dime. Niagara has been a relatively cheaper supply source than the Gulf Coast lately because of how tight Gulf/Northeast basis has become, he noted. Area temperatures got to a relatively torrid 89 degrees Wednesday, he said, but are due to cool down again this weekend.
As the September bidweek officially got under way, a marketer quoted Chicago basis at flat to plus 2.5 cents, which would have equated to fixed prices on either side of $5.20 based on Thursday’s screen close. However, he said he was seeing Chicago-Nicor at $5.10 bid and $5.15 offered on an online system. Basis strengthened a little with the Nymex fall-off, he said.
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