Only the two Arizona/Nevada points in NGI‘s price index table avoided an overall downturn Tuesday as cold fronts were expected to keep summer heat subdued in key northern market areas. Monday’s decline of 2.6 cents by September futures added a further minor bearish note to Tuesday’s cash trading.
Price drops were fairly consistent across varying geographic areas in ranging from a little less than a dime to about 40 cents.
Tropical Storm Dean showed up on the gas market’s radar scope Tuesday, but for the time being it is taking second place in attention behind what Shell referred to as Tropical Disturbance #34 approaching the South Texas offshore production area. As of 2:05 p.m. EDT the center of the low-pressure area was about 80 nautical miles north of Mexico’s Yucatan peninsula and possibly could have developed into a tropical depression Tuesday afternoon as it moved to the west-northwest at 10-15 knots, the National Hurricane Center (NHC) said. If the disturbance advances to tropical storm status, it would be named Erin.
Shell said it began precautionary evacuations of 88 nonessential personnel offshore South Texas Monday night and expected to evacuate about 100 more Tuesday. It also shut in temporarily about 5 MMcf/d from the North Padre Island 975 field (see related story). No other similar measures were able to be confirmed by press deadline. A spokesman said Tennessee was “just watching the situation at this point” and hadn’t gotten any notices of shut-ins or evacuations.
Meanwhile, at 5 p.m. EST the center of Tropical Storm Dean was about 1,140 miles east of the Lesser Antilles island chain that forms the eastern edge of the Caribbean Sea. It was moving quickly toward the west at nearly 21 mph, the NHC said. Some strengthening was forecast during the following 24 hours, it added.
Forecasters differed Tuesday on whether Dean had a chance to enter the Gulf of Mexico or would veer northward along the East Coast. Regardless, NHC’s “five-day cone” of projected tracking had the storm approaching the southern edge of the island of Hispaniola (Haiti and the Dominican Republic) early Sunday afternoon.
Dangerously high heat levels will persist throughout the South, Midcontinent and much of the inland West. However, what The Weather Channel called a “vigorous August cold front” and a “weak cold front” were due to keep cooling load subdued Wednesday in the Midwest and Northeast, respectively.
Production-area prices on Florida Gas Transmission and at the Florida citygate fell despite the pipeline keeping an Overage Alert Day in effect through at least Tuesday.
A Gulf Coast producer said NGI‘s query about any actions similar to Shell’s was the first thing he had heard about it. However, he added that this may be one of those situations in which a potential threat to offshore production materializes so quickly that there is not much anyone can do about it. He recalled similar situations occurring a couple of times in the last year or two and said neither resulted in any significant problems.
Due to the quickening tropical activity and the screen’s 14.6-cent rebound Tuesday, cash prices are already looking up for Wednesday, the producer continued. He saw Henry Hub being bid at $7.00 for Thursday’s flow date, about 14 cents above the Hub’s average Tuesday. There’s a good chance of most or all cash points rallying Wednesday, he said.
The National Weather Service (NWS) expects a broad coast-to-coast swath of the U.S. to experience above-normal temperatures during the Aug. 20-24 workweek. The area in question goes from the entire desert Southwest (including the southern three-fourths of California) through the Rockies into the Lower Plains/Midcontinent, Lower Midwest and Southeast from Louisiana through southwest Virginia. The areas where NWS forecasts below-normal readings are the western half of Washington state, South and Central Texas, and the entire Northeast along with Michigan and the northeast corner of Ohio.
Ron Denhardt of Strategic Energy & Economic Research expects a storage build of 18 Bcf to be reported for the week ending Aug. 10. Stephen Smith of Stephen Smith Energy Associates said that based on an increased sample size, it is projecting an addition of 22 Bcf, down 3 Bcf from his earlier Weekly Gas Outlook estimate.
©Copyright 2007Intelligence 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 |