What was forecast to be a week of above-normal temperatures throughout most of the U.S. began Monday with warming trends in some areas as advertised, but not enough heat to keep prices from continuing to fall at most points. Friday’s 21.8-cent slide by July futures also had bearish implications for Monday’s cash market.
A few points that were flat to as much as a dime higher extended a streak of mixed pricing days that had begun on the previous Monday. Most of the firmness was recorded at Northeast citygates, where highs in the low 90s are expected Tuesday. Nearly all of the majority losses were in double digits as they ranged from about a nickel to nearly 55 cents.
As has often been the case in recent weeks, the largest price drops occurred in the Rockies, where excess supply/transportation constraint issues are showing up again. PG&E allowed a weekend high-inventory OFO to lapse Monday but issued a new OFO for Tuesday. Malin and the PG&E citygate fell about 12 and 15 cents respectively. The Southern California border fell less than a nickel after SoCalGas allowed a weekend OFO to expire.
Kern River reported high linepack systemwide Monday. And Northwest will begin four days of unplanned anomaly investigations Tuesday just south of the Muddy Creek Compressor Station, which along with scheduled pig runs in the Muddy Creek-to-Kemmerer corridor required a reduction of northbound capacity through the Muddy Creek North Constraint Point, which could lead to a Declared Deficiency Period or even OFO if primary nomination requests through the Muddy Creek North Constraint continue to exceed available capacity, Northwest said (see Transportation Notes).
Scattered showers predicted for Tuesday in much of the South will limit air conditioning demand, thus idling quite a few gas-fired peaking generation units. The Midwest is due to top out around 90 degrees at most locations Tuesday. The Northeast will stay hot for two more days before cooler air enters the region Thursday, according to The Weather Channel.
Depending on where the heat is going to be Wednesday, a Texas-based marketer said he saw a chance of some cash rallies Tuesday. However, he conceded that it will be difficult for many points to rebound after July futures fell another 19 cents Monday.
The marketer said he was doing “just a little so far” for July bidweek. He reported weakening basis at the Chicago citygate. Chicago was going for basis of minus 13 cents Monday, he said, down from a report of minus 12-10 cents Friday. In fixed prices, the marketer said he saw an average of $6.84 trade on ICE for NIPSCO and Nicor, while Peoples averaged $6.83.
Citigroup analyst Tim Evans projects storage additions of 85 Bcf and 70 Bcf in the weeks ending June 22 and June 29 respectively.
The number of drilling rigs actively searching for gas in the U.S. rose by 11 in the week ending June 22, according to the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/). The gain was about evenly divided between offshore and onshore operations, with the Gulf of Mexico adding six rigs and onshore rising by five, Baker Hughes said. Its tally was up 2% from a month earlier and 9% higher than a year ago.
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