With Tropical Storm Alberto rapidly becoming just an afterthought for the natural gas industry (except for the reductions of power generation demand that its heavy rains were causing in the eastern end of the South), most points bowed to the lack of significant cooling load in northern market areas by recording moderate declines Tuesday.
A few instances of flat to nearly a dime higher numbers, mostly in the Midcontinent/Midwest and West, prevented a clean sweep of softening. Nearly all losses were in the range of a couple of pennies to about 20 cents. However, Florida Gas Zone 3 plummeted nearly half a dollar, reflecting the cooldown that Alberto had brought to much of the Sunshine State.
After having an Overage Alert Day in effect from Monday through Saturday of last week due to low linepack and heavy market-area demand resulting from hot weather, Florida Gas Transmission cautioned shippers that it might declare an Underage Alert Day for Wednesday. Linepack is currently high and the tropical storm’s abundant rain has decreased market demand, FGT said Tuesday.
After making landfall south of Tallahassee, FL around midday Tuesday, Alberto had entered southern Georgia by late that afternoon and its center was near the town of Valdosta as of 5 p.m. EDT, the National Hurricane Center (NHC) said. The storm was expected to become extratropical Wednesday while moving through the eastern Carolinas before moving out to sea for an anticipated rendezvous with Canada’s Maritimes provinces.
More mostly small declines are likely in the cash market Wednesday after July natural gas futures gave back all of Monday’s nickel gain plus an extra penny. The gas screen action was accompanied by huge losses among Nymex’s petroleum product offerings (see futures story). However, physical gas may be able to rally to some extent late this week or early next week after all of the South has returned to its usual hot and muggy June weather and is joined by warm-ups in the Northeast and Midwest.
Although the eastern South has cooled off, the region’s other end is seeing normal June heat. In fact, highs in the 100s are likely Wednesday in much of western Texas and western Oklahoma, The Weather Channel said. Of course, the desert Southwest is its usual sizzling self at this time of year, and western highs in the 90s may push as far north as southeast Montana, it added.
It should be pretty warm in much of the U.S. next week, according to the National Weather Service (NWS). In its forecast for the June 19-23 workweek, the federal agency predicts above normal temperatures throughout the Northeast, Midwest, Mid-Atlantic and most of the central and western South (but not along the Gulf Coast). It also looks for higher than normal readings throughout California, Arizona and New Mexico along with most of Colorado and the southern halves of Nevada and Utah. NWS expects below normal conditions along the Canadian border in northern Washington, Idaho and western Montana. Below normal temperatures are also forecast for the East Coast strips of southeastern North Carolina, South Carolina and Georgia and throughout the Florida peninsula (excluding the Panhandle).
A marketer in the Upper Midwest would prefer that comfortable 70s temperatures stick around for a good while, but is resigned to expecting local thermometers hit the 90s this weekend. She reported picking up a Consumers Energy citygate package at $5.98 Tuesday, and hopes that delivered gas numbers will remain below $6.
The marketer said she has trouble understanding why prices are staying relatively high when the industry has so much gas in storage that operators are expected to start running out of injection capacity in the next few months. “MichCon [Michigan Consolidated Gas] has alerted us that their storage is close to full,” she said. Another bearish factor, according to the marketer, is that she has been told that the Gulf of Mexico platforms that were damaged last year are being repaired to be more resistant to hurricane damage, so chances of another Katrina/Rita-like devastation of production should be less this year.
Although Alberto’s existence was brief and nonthreatening to offshore producers, its formation over the June 10-11 week serves as a potent reminder that last year’s disastrous hurricane season also got an early start. Arlene, which caused minimal damage in making landfall just west of Pensacola at the western end of the Florida Panhandle, was designated as a tropical storm on June 9, 2005.
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