With natural gas flow constraints out of the Rocky Mountains continuing to ease, the region once again dominated headlines on Monday as half of NGI‘s points in the region recorded $1-plus gains. Despite near-record natural gas storage levels and the lack of any immediate storm threat to the Gulf of Mexico, cash prices across the board were firm to begin the week.
Rockies gas prices have been all over the map over the last few months as producers have endured transportation difficulties. Over the last month, cash quotes on some points in the region have been as low as 7 cents/MMBtu (see Daily GPI, Sept. 12). Getting gas to points east got a little easier late last week. On Friday, CIG and Cheyenne each recorded 40-plus cent gains, a result of a capacity deal completed Thursday that increased capacity on Cheyenne Plains going east from 465 MMcf/d to 590 MMcf/d. Capacity on the Cheyenne Plains pipeline has been limited ever since a compressor station fire in mid September (see Daily GPI, Sept. 24; Sept. 18).
According to one Midcontinent gas buyer, prices on Monday were even higher earlier in the day. Prices were higher in the beginning of the day and they came off a little bit in the end,” he said. “I think people are realizing that storage is getting full and there is literally no demand, but people are continuing to fill all the little cracks in storage with excess gas for the winter. Prices continue to go up, which defies logic, but that is the way it is.”
Looking at the weather picture, one analyst said October 2007 is on track to be one of the warmest Octobers on record for the United States unless the last week of the month turns unseasonably cold. Noting that last week was very warm relative to normal across the southern and eastern United States, Daniel Guertin, an analyst with Lehman Brothers, said there will likely be more of the same this week.
“A very warm pattern will be in place again this week across the South and East,” he said. “Temperatures later this week will warm to 10-15 degrees above normal in parts of the East, with highs warming into the lower 80s by Friday. These temperatures are unusually warm for this time of year but still cooler than the temperatures observed last week.”
Guertin added that Texas will also be included in the unseasonably warm temperature bracket, with highs well into the 80s and heat indices back into the lower 90s, especially in Houston.
Forecasters also are quick to remind the public that the while the tropics have recently been devoid of any significant storms, the 2007 Atlantic hurricane season is not over yet. On Monday afternoon, a debate was swirling about the prospects of a low-pressure system currently in the Gulf of Mexico.
The National Hurricane Center (NHC) identified the area of low pressure over the southwestern Gulf of Mexico as one to watch. “Slow development of this system is possible during the next day or two as it moves generally northwestward,” the NHC said.
AccuWeather.com said it is currently tracking a few tropical waves trekking westward through the Atlantic Basin. “The feature in the Atlantic Basin that bears the most watching in the near future…is an area of low pressure in the northwestern Caribbean,” said Kristina Baker, a meteorologist with AccuWeather.com. ‘With little wind shear overhead, the low could potentially develop into a tropical depression before moving over the Yucatan Peninsula. However, the low’s proximity to land will work against the formation of a tropical system.”
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