Price movement continued to be mixed Friday, but this time there was a more even divide between gains and losses than earlier in the week when there was a more sharply defined majority of points going either up or down. Moderate increases outweighed declines as prior-day futures support combined with a slight resurgence of cooling demand in the eastern end of the South.
Most of the cash market ranged from flat to a little more than 40 cents higher, but only one point realized a gain of more than about a quarter. The minority losses were concentrated in western markets, with the biggest ones of up to about 45 cents occurring in the Rockies, where moderate weekend temperatures would limit demand for either heating or cooling.
Monday’s cash trading will have negative screen guidance. After being in higher territory for most of the day, June futures slid late in the session and wound up with a daily loss of 13.1 cents to $7.944, undoubtedly disappointing market bulls who had hoped that Thursday’s breach of the $8 level would have stuck around a while longer.
Northeast quotes rose solidly in double digits despite a warming trend beginning that would eliminate a modest amount of heating load that had developed with a cold front moving into the region around midweek. The interior Northeast should have seen weekend highs in the 60s to near 70, The Weather Channel said. Conditions in the Midwest were still moderate Friday, but that section of the nation also would be warming, with Chicago forecast to experience a high around 80 degrees Saturday.
Meanwhile, cooling load in the eastern South was starting to return after a near-disappearance with temperatures peaking just above 70 through Thursday. Birmingham, AL, had a high near 80 in Saturday’s forecast.
San Juan Basin producers were dismayed to learn that not only would a maintenance-related total outage of El Paso’s San Juan Crossover not end sometime during Friday’s gas day, but would be further extended at least part way into Saturday (see Transportation Notes). Both the Blanco and Bondad pools fell nearly a dime.
A western utility buyer said he had to do some re-sourcing of supply from the Permian Basin last week to work around the San Juan Crossover outage; he normally buys most of the company’s gas from San Juan Basin. The crossover outage was not a major problem, he said, just making things “inconvenient and a little bit pricier.” His utility’s service area is getting pretty hot, but since it’s a “dry heat,” power generation load hasn’t risen much yet, the buyer said. However, he noted that it seems like high summertime temperatures keep arriving earlier and earlier with each passing year.
Although they may have contributed to Rockies softness, high-linepack OFOs by both of California’s giant distributors (see Transportation Notes) did little to faze market-area prices. The Southern California border fell only about a nickel, while the PG&E citygate and Malin both saw dime-plus gains.
The SoCalGas OFO apparently was prompted by a huge increase of 449,000 MMBtu/d, or 18%, being delivered into its system Friday, according to Bentek Energy’s analysis of flows at a number of natural gas trading points (https://intelligencepress.com/features/bentek/).
A dearth of either heating or cooling load caused Rockies price weakness, but the region may start to see power generation demand grow soon as Denver-area highs would be rising into the 80s over the weekend, one source said. He noted that the Stanfield premium to Opal grew to nearly $3.50 Friday, which he attributed largely to a Kemmerer Station bottleneck limiting northbound flows on Northwest.
“Everything’s quiet at our place,” said a utility buyer in the South. His company was buying “a little” spot gas each day for injection into storage, he said. Current burns are relatively low due to mild weather and already covered by summer term contracts, he added.
The number of drilling rigs actively searching for gas in the U.S. rose by 10 to 1,466 during the week ending May 18, Baker Hughes reported (https://intelligencepress.com/features/bakerhughes/). That was unchanged from a month earlier but 6% above the year-ago tally, the company said. A decline of two rigs in the Gulf of Mexico during the week was offset by a gain of 12 onshore rigs.
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