Hot weather from the mid 80s to around 110 was expected to dominate the next-day forecast, but that failed to sway cash traders, who paid more attention to continuing futures weakness in sending prices lower at virtually all points Tuesday.
Flat numbers at El Paso South Mainline/Northern Baja and Panhandle Eastern constituted the only point to avoid losses ranging from a couple of pennies to about 30 cents. The Gulf Coast was joined by the Northeast and California in seeing most of the declines exceeding a dime.
The Florida citygate fell another 30 cents or so as the Federal Energy Regulatory Commission announced that it was investigating recent price spikes at that location (see related story).
Wednesday’s cash market will continue to have negative futures guidance — albeit minor — after Nymex’s September contract dropped another 1.2 cents Tuesday in its fourth straight day of decline (see related story).
Despite a huge increase of Henry Hub volumes from 821,000 MMBtu to 1,124,000 MMBtu traded on IntercontinentalExchange, the online platform said Henry prices fell about a dime.
Encana spokeswoman Carol Howes said a company well in northeast British Columbia was still on fire Tuesday, but all essential equipment had been removed, including the blowout preventer stack. There was no indication of any link to bombings of Encana facilities in recent months, she said.
The National Hurricane Center (NHC) was monitoring three Atlantic systems Tuesday afternoon. The low-pressure one in the southeastern Gulf of Mexico had increased odds to 70% for becoming a tropical storm before making expected landfall in Louisiana, but it was doubtful whether the anticipated strengthening would be enough to disturb offshore production. However, BP said it had suspended work on a relief well for its Macondo oil leak disaster because of impending bad weather. Enbridge was also reported to have evacuated some nonessential personnel from its offshore pipeline system.
Another low-pressure system about 850 miles east-northeast of the Leeward Islands had strengthened “a little” but remained disorganized, NHC said. Meanwhile, a tropical wave about 700 miles east of the southern Windward Islands had a low (10%) of becoming a tropical cyclone during the succeeding 48 hours, the agency said.
“We’re feeling the heat,” said a Midwest marketer, but he attributed soft pricing to plenty of supply, adding, “I think that’s what we’re up against.” The market can still put gas into storage and meet the power generation demand at the same time, he said.
His company was still seeing “good” demand from electric producers in the Midwest, but obviously it was not enough to support gas prices, the marketer said. Similarly, heat advisories “all over the place” were unable to keep the gas market firm, he said. Also, a total outage of Rockies Express deliveries into Tennessee was dumping extra supplies into the Midwest, he added.
Stephen Smith of Stephen Smith Energy Associates predicted a storage build of 34 Bcf for the week ending Aug. 6, which he said was up from a previous estimate of 28 Bcf.
Â©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |