Prices made small gains at most points Tuesday, nearly all of them in the East. Hot weather had lessened a bit since late last week but was still considerable enough with high forecasts on either side of 90 in the South, Northeast and parts of the Midwest and Rockies to keep power generation load fairly strong. The previous day’s 3.2-cent futures also contributed to cash strength.
Most points were flat to nearly a dime higher; the Florida citygate stood out with a spike of about 30 cents to average a little more than $7 as Florida Gas Transmission neared the end of three consecutive weeks of an Overage Alert Day in its market area. Nearly all of the locations that fell from 2-3 cents to a little more than a dime were in the West.
The cash market will continue to have some screen support Wednesday after the August futures contract added another 6.3 cents in its penultimate day of trading Tuesday (see related story).
Essentially normal summer heat will continue in most areas Wednesday outside the West Coast and Canada but will not be quite as severe as the conditions of late last week.
Southern said inventories at its two storage facilities in Louisiana and Mississippi stood at 43.3 Bcf as of last Thursday (July 22), or about 72% of total capacity of 60 Bcf. That was a little ahead of the refill pace two years ago when storage was at 42.3 Bcf (70%) on July 24, 2008 but way behind the 55.5 Bcf level (93%) reached on July 23, 2009.
Atlantic tropical storm activity was nil again as of Tuesday afternoon, the National Hurricane Center said.
The Bureau of Ocean Energy Management, Regulation and Enforcement said it was concluding reports related to former Tropical Storm Bonnie Tuesday. No production platforms or mobile drilling rigs remained evacuated, the agency said. It said five companies had reported total shut-ins of 417 MMcf/d by 11:30 a.m. CDT Tuesday, or about 6.52% of normal Gulf of Mexico gas production.
A Texas marketer said he expected cash prices to be up a little again Wednesday, not so much because of the heat but based more on Tuesday’s futures increase. The firmness may not last, though, he said, because Northeast temperatures are expected to retreat back into the 80s going into the weekend.
Through Tuesday afternoon it looked like the Chicago citygate index for August would be around $4.60 or so, the marketer said, but it could get a little higher if the screen keeps firming Wednesday. He perceived bidweek prices as rising slightly since Monday, mainly because of the futures gain.
IntercontinentalExchange had a similar estimate of the Chicago index, saying its numbers averaging a little less than $4.61 Tuesday were up about 4 cents from Monday.
Stephen Smith of Stephen Smith Energy Associates projected a storage build of 32 Bcf being reported for the week ending July 23.
Three more drilling rigs entered the U.S. search for natural gas during the week ending July 23, according to the Baker Hughes Rotary Rig Count. Two of those rigs were in the Gulf of Mexico, and one was onshore, Baker Hughes said. Its latest tally is up 3% from a month ago and 45% higher than the year-earlier level.
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