Prices were mixed in the East Friday, ranging from as much as about 15 cents lower to a little more than a dime higher. Many points were flat or close to it. Despite torrid weather continuing in much of the West, quotes fell from about a nickel to almost a quarter at nearly all point in that region. Only flat intra-Alberta and El Paso-Permian numbers and a rise of about a nickel at Waha diverged from the overall western softness.
Eastern markets struggled with price signals from different directions. A weaker day-earlier screen and the dropoff in industrial load over a weekend argued for softness, but hot weather that appears to be entrenched through this week and lingering concerns about potential Hurricane Emily-caused production losses tugged the other way, especially after government forecasters indicated Friday that the storm is now likely to hit land near Brownsville at the southern tip of Texas (see related story).
One source speculated that what was considered a bearish storage report Thursday may have been a small factor in the general western downturn and declines at some eastern points.
A high-linepack OFO by SoCalGas and a cold front due to move through the Pacific Northwest over the weekend apparently trumped high heat level forecasts for most of the rest of the region. Also, some extra supply entered the Pacific Northwest market late last week as the annual turnaround at Westcoast’s McMahon Plant came to a close.
SoCalGas will have a 220 MMcf/d constraint in place at two border delivery points Monday through Wednesday this week due to maintenance on its transmission system (see Transportation Notes).
Emily weakened a bit to a Category Two storm (winds of 96-110 mph) Friday but was expected to regain strength as it moved toward the western Caribbean Sea, the National Hurricane Center (NHC) said. At 5 p.m. AST the center of Emily was about 350 miles southeast of Kingston, Jamaica and moving to the west at nearly 20 mph. A gradual turn back to the storm’s former west-northwest direction was anticipated within the next 24 hours. Maximum sustained winds were down to about 105 mph. Hurricane-force winds extended outward up to 35 miles from the center.
Producers were due to begin repeating the evacuation process over the weekend, but this time in the western end of the Gulf, which has emerged essentially unscathed from tropical storm activity so far this year. Shell said it would start taking nonessential personnel ashore from its Western and Central Gulf of Mexico operations Saturday morning. “This action is being taken as a precaution and to reduce offshore personnel staffing levels in the event further evacuations are needed depending on the track of the hurricane,” the company said. No Shell-operated production had been impacted as a result of Emily as of Friday afternoon, it said.
In its final advisory on Hurricane Dennis-related shut-ins, Minerals Management Service said only 65.04 MMcf/d of gas and 30,379 bbl/d of oil remained offline Friday, based on reports from four companies that reached the agency by 11:30 a.m. CDT. Cumulative deferred production of gas from July 8 through last Friday was 23.246 Bcf, equivalent to 0.637% of the Gulf’s approximately 3.65 Tcf annual output.
While New England and a small part of the lower Northeast were expected to experience relatively moderate weather during the weekend, muggy and very warm conditions were the watchword for the rest of the Northeast along with the Midwest and South.
“It’s gotten over 90 degrees lately,” said a utility buyer in the western Northeast, and much of the region likely will stay hot through this week. He said his company has been out of the daily market for a while because of the high prices, but is still injecting into storage from its baseload supplies. He was hoping that Emily won’t bother any offshore production, but realized the possibility that the storm could still veer northward while in the Gulf of Mexico.
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