With the second hurricane in as many weeks heading toward the Gulf of Mexico (GOM) production area and causing some operators to have second thoughts about continuing to repopulate their offshore facilities, prices were up at all but two points Monday. The cash market also had support from the previous Friday’s advance of 12.7 cents by October futures and the return of industrial load from its typical weekend decline.
In addition, enough early autumn chill is showing up in some areas that it didn’t take a stretch of the imagination to believe that heating load is starting to contribute to price firmness.
Westcoast Station 2’s drop of a little less than C10 cents and a flat Sumas were the only exceptions to rising prices. Otherwise Florida Gas Zone 3 and the Florida citygate joined several Rockies points in triple-digit spikes that handily led gains ranging from about a nickel to nearly $2.30.
Florida Gas Transmission ended an Overage Alert Day (OAD) during the weekend — but only for a day. A new OAD, with a 20% imbalance tolerance that was a bit tighter than the pipeline’s usual 25%, was in effect Sunday and Monday.
The restoration of shut-in GOM production was continuing Monday, with Minerals Management Service (MMS) saying 62 companies had reported 4,748 MMcf/d of off-line gas to it by 11:30 a.m. CDT Monday. That represented a major quickening of the recovery pace, as 5,907 MMcf/d of shut-ins had been reported Friday. MMS also said 1,032,612 b/d of oil remained shut in Monday, while platform and mobile drilling rig evacuations had been reduced to 200 and 15, respectively.
With Ike expected to enter the southeastern Gulf Wednesday, some producers were already beginning precautionary evacuations again Monday (see related story).
The National Hurricane Center’s (NHC) “five-day cone” of projected trading had Hurricane Ike pointed at a potential landfall around Saturday night on the upper Texas Gulf Coast south of Houston. There’s a lot of time for a change of course until then, of course. For the moment, though, Ike had weakened to a Category One hurricane with maximum sustained winds of 80 mph while it hugged the southern coast of central Cuba Monday afternoon. At 5 p.m. EDT Ike’s center was about 215 miles southeast of Havana and moving toward the west at about 14 mph, NHC said. It expected a turn toward the west-northwest to being Monday night.
There was one dropout from the recent parade of named storms. The remnants of Tropical Storm Josephine were about 1,100 miles east of the northern Leeward Islands and in a area where upper-level winds weren’t conducive for redevelopment, NHC said.
The South, Southwest and inland California will be about the only refuges of significant cooling load left Tuesday as fall-like weather is showing up in most other areas. Overnight lows in the 40s and 50s are due Tuesday from Western Canada and the Pacific Northwest through the Rockies and Midwest into New England.
A Rockies producer noted that daytime temperatures in the 50s in Denver probably helped account for triple-digit price spikes in the region.
The producer also said he was getting a bit more optimistic about Rockies prices avoiding a major basis blowout this month, which some had been dreading due to a Rockies Express (REX) test that would back up an estimated 500-800 MMcf/d into the region for most of September (see Daily GPI, Sept. 3). He noted that another producer had reported about 300 MMcf/d being shut in the Pinedale Anticline play, and he knew of other producers who had shut in wells in the Piceance Basin, although he didn’t know how much.
He also cited a analysis by Bentek Energy that showed Clay Basin storage levels as being well below where they normally are by this time of year. “Between the production cutbacks and available storage injection capacity, maybe the basis blowout this month won’t be as bad as we thought,” the producer said. “Weather is still the big wild card.”
©Copyright 2008Intelligence 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.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |