After last week ended with two straight days of across the board declines, mixed price movement returned to the market Monday. Further drops dominated in the Gulf Coast and Northeast and to some degree in the Midwest. Quotes were mostly higher in the Midcontinent and West.
Losses ranging from a couple of pennies to about 45 cents slightly outnumbered points that were flat to nearly $1.45 higher. El Paso’s two San Juan Basin pools, which had seen the previous Friday’s biggest drops by far, were recovering much of the lost price territory Monday.
It will be difficult for the Midcontinent and West to maintain their rallies Tuesday after the new prompt-month November futures contract plunged 40.7 cents amid an overall meltdown in Nymex’s energy complex, where crude oil took a dive of $10.52 to $96.37/bbl (see related story). The U.S. House’s rejection of a $700 billion bailout plan for financial markets left energy traders fearful of more economic shocks to come and their destructive impact on energy demand (see related story).
The Rockies market welcomed a second infusion of takeaway capacity when Rockies Express (REX), after saying Friday it was taking nominations for Saturday deliveries to its ANR interconnect in Kansas after nearly a month-long section outage for hydrostatic testing, followed up by accepting nominations for Monday at the Panhandle Eastern interconnect in Missouri (see Transportation Notes). As of the end of last week REX was still saying it expected to resume service to Panhandle Eastern no later than Wednesday of this week.
Hurricane Kyle was in the process of losing its tropical characteristics as it swiped southwestern Nova Scotia over the weekend as a minimal hurricane with winds of 75 mph, The Weather Channel (TWC) said. Its remnants dissipated at sea, and the National Hurricane Center issued its last advisory on Kyle Sunday night.
Subtropical Storm Laura was christened during the weekend. Laura was expected to remain well out in the Atlantic and not threaten any land masses unless it manages to survive long enough on a projected tracking that would have it approaching Ireland and the United Kingdom in the coming weekend.
Shut-in gas production in the Gulf of Mexico fell another 400 MMcf/d over the weekend to 3,509 MMcf/d, according to reports from 49 companies submitted Monday to Minerals Management Service (MMS). The agency said oil shut-ins had declined to 623,789 b/d, while evacuated platforms dwindled to 111 and the count of evacuated mobile drilling rigs remained at one (see related story).
A utility buyer in the South said he needed to buy a little more October baseload than previously expected when “we kind of got fooled on our hedging plans” for storage injections. Offers for a basis range of minus 19-16 cents for TGT Zones SL and 1 looked more attractive than fixed prices or index-based deals (all index plus a penny or so), he said.
It’s gotten cool but not terribly cold yet, reported a Northeast utility buyer. The company has gotten a little ahead on its storage injection schedule, he added, so it is considering cutting back on planned daily purchases in the October aftermarket. The buyer noted that current GOM outages seem relatively light in comparison to the market havoc wreaked by hurricanes Katrina and Rita three years ago.
Almost as if in response to a recent call by the CEO of Chesapeake Energy for gas producers to cut back on drilling because of low prices (see Daily GPI, Sept. 24), the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/) showed a loss of 30 rigs engaged in the U.S. search for gas during the week ending Sept. 26. Onshore rigs took the lion’s share of the hit by dropping 25, while the Gulf of Mexico saw a decline of five, Baker Hughes said. Its latest tally is down 3% from a month earlier but up 8% from the year-ago level.
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