Prices continued to weaken at nearly all points Tuesday in boththe incremental and October bidweek markets. Offshore supplies wereslow in returning from hurricane-related outages, but tradersseemed to discount that factor and to depend on abundant gaselsewhere to take up the slack. They also observed that weather andstorage fundamentals remain weak.
Chicago citygates were an exception to falling October numbersas a large marketer reported a rebound there Tuesday into the mid$2.10s-about where bidweek started-following trading that haddipped below $2.10 occasionally. That was supported by quotesindicating an initially strong aftermarket.
One source reported 1st-only Chicago deals done Tuesday at$2.16-17, more than a nickel above his bidweek average. Hespeculated the aftermarket will be firmer for at least a few daysbecause some of the offshore Gulf Coast supplies sold for Octoberstill will not have come back on-line, causing affected traders toante up for makeup gas. Also, he noted, Chicago is expected to seea couple of frosty days this weekend before a return of Indiansummer next week.
The West also was suddenly showing a little late firmness forOctober, a marketer said. He attributed that to a bit of a shortsqueeze developing because a lot of people “waited until the lastminute to step up and buy, and now they’re having to pay theprice.”
A buyer said he didn’t do any baseload deals at Kingsgate forOctober “because there is something of a disconnect in the pricingthere.” The AECO-to-Kingsgate and Kingsgate-to-Malin pricedifferentials made it uneconomical to buy at Kingsgate; “AECO isjust too strong,” he added. Thus he will make incremental Kingsgatepurchases as needed during the month.
Despite the slowness of Gulf supply returning from HurricaneGeorges outages, traders acted as if everything was hunky-doryagain in sending last-day-of-September incremental prices downanywhere from 2-5 cents in California and the Rockies to 5-10 centsor more at most other points. Apparently a lack of weatherfundamentals was more meaningful to them. Storage is full andthere’s an oversupply situation forming with everyone turning todrilling for natural gas because oil prices are so low, one sourceobserved. “The days of hurricane hype clearly are over,” heconcluded.
A Houston source noted how glad he was that a September gasmarket full of hurricanes and tropical storms was nearly over. “Infact, I’m thinking of inviting some people out Wednesday night fora TGIO [Thank God It’s October] party.”
Most of the Gulf pipes impacted by Georges-related supply lossessaid they were starting to recover gas again, but the procedure wasvery slow. Florida Gas actually recorded additional outages fromMobile Bay, raising its total to 380 MMcf/d Tuesday. A spokeswomansaid the pipeline had been told Mobile Bay production would stayshut in at least through today or possibly longer.
Stingray was one of the few affected pipes that was close tonormal throughput again. Texas Eastern’s Cameron System (southwestLouisiana) was coming back up rapidly and expected to be at fullproduction again by today, but the Venice System (southeastLouisiana) remained totally shut in. Trunkline flow had gained 50MMcf/d to a total of 150 MMcf/d, but that left about 650 MMcf/doffline.
Other outage reports Tuesday included Columbia Gulf, 750 MMcf/d;Koch Gateway, 800-900 MMcf/d; Tennessee, 500 MMcf/d; ANR, 500MMcf/d; HIOS, 450 MMcf/d; and Transco, 1.8 Bcf/d. Sonat-operatedlines were essentially unchanged from Monday’s figures except for aslight loss decrease on Sea Robin.
Chevron said it had begun returning to work Monday in thewestern Gulf, where it was producing 275 MMcf/d Tuesday andgaining, a spokeswoman said. People were going out to assess damagein the central Gulf, where Chevron expected to begin activatingproduction on a well-by-well basis as early as Tuesday afternoon.The Mobile Bay/eastern Gulf area was considerably more iffy, andthe producer would have no estimates there until today “at the veryearliest,” the spokeswoman emphasized.
A runaway freighter in the Chandeleur Sound area off Louisiana’sMississippi River delta (see Daily GPI, Sept. 29) was brought undercontrol without hitting any offshore facilities and was being towedto Tampa, FL by a tugboat, the Coast Guard said.
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