Only a few points in the Pacific Northwest/Northern California area were able to avoid to avoid continuing price drops Monday. As predicted last week, temperatures are dividing into below normal in the West and above normal in most of the East. The post-weekend restoration of industrial demand had essentially no price-boosting impact.
Losses ranged from a couple of pennies in Western Canada to nearly a dollar; nearly all declines were in double digits. Nearly all of the small losses from 2 cents to about a dime had some connection with the Northern California and Pacific Northwest markets as a consequence of a Ruby Pipeline outage (see Transportation Notes).
The cash market Tuesday will again have negative futures guidance after the prompt-month contract posted a drop of 6.3 cents (see related story), but it won’t be as bearish as the screen loss of 14 cents on the previous Friday.
A shutdown of Ruby Pipeline following a fire at a Utah block valve yard (see Transportation Notes) caused associated points Malin, the PG&E citygate, Stanfield, Sumas, Westcoast and Kingsgate to experience Monday’s only price increases ranging from about 2 cents to nearly a dime. No timeline has been set for resuming flows, a spokesman said.
Throughput on Ruby had averaged 953 MMcf/d in December, according to Bentek Energy. It said upward pressure on Malin and PG&E citygate quotes “is highly likely, while Opal could see significant downward pressure.”
One western trader likely was typical of other buyers in the region in saying her company was withdrawing more from storage to compensate for the lack of Ruby supplies. And in saying “never a dull moment,” a Rockies producer noted that “this is on top of the ones [maintenance and force majeure-related restrictions] already in effect on Trailblazer and Bison. Kern River is reporting high linepack because of this, so we are probably in for a rough stretch on prices and the differential.”
The Opal Plant was having problems with excess gas due to other downstream pipes being able to accept all of the tailgate supplies formerly feeding into Ruby (see Transportation Notes).
Something that seemed to have been resolved a couple of months ago was resurfacing: Tennessee’s Zone 4 Line 300 prices were getting crushed again due to the ongoing onslaught of Marcellus Shale production trying to enter the pipe in that segment. The Line 300 prices, which had been at near-parity with Line 200 numbers for some time, hit a low of $1.60 and its average around $2.20 was by far the market’s cheapest gas. “All of the low stuff [prices] is Marcellus production (gas east of Station 313),” a source said.
A Midwest marketer said her area’s lows were in the freezing area for now, but the 15-day forecasts showed growing warmth. The company currently is not active in the spot market, she said, because it is still long on previously bought gas.
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