Prices were up at nearly all points Wednesday as heat levels were on the rise in some areas, spurring extra power generation demand to keep air conditioners humming.
Only small losses at two disparate points (Texas Eastern-East Texas and Questar in the Rockies) averted increases across the board. Otherwise, gains ran from about a nickel to a quarter or so in most cases. Once again, the Florida market was out of the mainstream, but this time it was in larger gains than the market in general. Florida Gas Zone 3 rose about 45 cents while the Florida citygate was up about 35 cents.
Chances of price firmness continuing Thursday are considered good after a 42.7-cent spike in July natural gas futures. In addition, a gradual shift to more summer-like weather should be under way in the Midwest by Friday.
The Northeast is due to remain unseasonably cool for a little longer, but it will be following the Midwest in a transition to hotter temperatures over the weekend.
In the West, it should be cooler than average over the northern Rockies and Pacific Northwest, according to The Weather Channel, but the Southwest will remain hot through the weekend (Phoenix is expected to top 110 degrees Thursday for at least the third day in a row). Anecdotal evidence of the heavy power generation demand in the desert Southwest came from El Paso, which said it had considered declaring a Strained Operating Condition for its system Wednesday after an unexpected surge in generator usage late Tuesday put its storage facility at maximum withdrawal (see Transportation Notes). The situation was being resolved Wednesday, a spokesman said.
The PG&E citygate managed an increase of a little more than a dime and Malin rose about 15 cents despite the giant Northern California utility declaring a high-linepack OFO (see Transportation Notes).
Ex-Tropical Storm Alberto was downgraded to a tropical depression early Wednesday and then became nontropical later that morning while traversing eastern North Carolina. It was expected to move out into the Atlantic that night. Elsewhere the tropics were quiet, with no storm formation expected for at least 24 hours.
Although Alberto was still dumping copious amounts of cooling rain Wednesday in the Carolinas and lower Mid-Atlantic, air conditioning demand was starting to reassert itself in the East Coast section of the South. For instance, Atlanta, which recorded a high of 76 degrees Tuesday while Alberto passed by to the southeast, had a peak of 90 in the forecast for Thursday.
There was also evidence of load increasing again in Florida. Bentek Energy’s analysis of pipeline flows at several key market points (https://intelligencepress.com/features/bentek/) found that 1,903,000 MMBtu in FGT market-area deliveries had been nominated for Wednesday’s gas day. That was up 73,000 MMBtu/d, or 4%, from the day before, Bentek said.
Global Insight’s Jim Osten expects the Energy Information Administration to report a storage injection of 85 Bcf for the week ending June 9. Reuters news service said its survey of 24 industry players found an average estimation of an 88 Bcf build. That was out of a 72-109 Bcf range, Reuters said.
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