Price movement was mixed Monday, with gains dominating slightly in the Gulf Coast but the rest of the market mostly softer. Except for triple-digit plunges in the Rockies, in most cases points did not stray very far up or down from flat. Forecasts of colder post-holiday weather in most of the East early this week were proving to be overstated, and the storage report-driven spike of 49.2 cents last Wednesday had little impact in supporting most cash trading points.
A sizeable majority of points ranged from 2-3 cents to nearly $2.15 lower. Most quotes that were flat to up about a quarter were concentrated in Louisiana.
Tuesday’s cash market will again have prior-day screen support, but considerably less than before as Nymex’s January contract added another 9.4 cents Monday (see related story).
Mostly moderate weather had been expected to continue in the West as this week began, but predictions of much lower temperatures in the East that had driven pre-holiday gains at a slight majority of points because of trading for Monday-only flows were proving to be largely unfounded. In fact, temperatures are due to rise Tuesday in the South, Midcontinent and several sections of the Midwest.
The Northeast can expect colder conditions Tuesday, but obviously not cold enough to spur any significant increases in heating load.
The early-week weather doesn’t seem to be as cold as pre-Thanksgiving forecasts had indicated, a Texas-based marketer said in explaining softness in most of the market. He noted that Boston was “practically balmy” for the start of December with a high near 60 Monday, but added that Northeast mercury levels will start sliding Tuesday and should be pretty cold by the end of the week. For that reason he expects prices to be moving mostly upward on Tuesday, but said he is “generally optimistic” about rising prices anyway.
A Rockies producer said mild weather in Denver and an ongoing compressor outage on WIC were probably to blame for the hypersoftness in his market. “It’s probably 50 degrees here [in Denver] right now [Monday afternoon], and its supposed to reach 60” Tuesday. He said the unit outage at Douglas Compressor Station on WIC is expected to extend through Friday and is reducing station capacity from 1,520 MMcf/d to 1,120 MMcf/d. In addition, REX will have a capacity constraint on Questar Overthrust to deal with for part of Tuesday, he added (see Transportation Notes).
The 2008 Atlantic hurricane season officially came to an end Sunday with no new activity. The spot gas market and storage refill process appear to have been relatively unaffected by the lingering offshore production outages caused by hurricanes Gustav and Ike. Minerals Management Service (MMS) said 1,805 MMcf/d remained off-line as of Nov. 20 (see Daily GPI, Nov. 21). The next shut-in statistics will be issued Wednesday, as MMS has shifted to a schedule of reporting them every other week on Wednesdays.
The Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/) found a huge plunge in the number of drilling rigs actively seeking natural gas in the U.S. during the week ending Nov. 26 (note that because of the Thanksgiving holiday, the count went only through Wednesday of last week instead of its normal Friday completion). The count fell by a whopping 68 to 1,443, Baker Hughes said. Virtually all of the decline occurred onshore, as only one rig left the Gulf of Mexico search, it said. The latest Baker Hughes tally is down 6% from a month earlier and 1% less than the year-ago level.
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