Despite the generally moderate to merely cool weather predicted for many areas early this week, prices were able to rally by mostly small amounts Friday at a modest majority of points in trading for Sunday-Monday flows (due to the month-to-month transition Sunday). However, an eastward-moving cold front that brought blizzard-like conditions to the Rockies earlier last week was already cooling much of the Midwest and was due to bring lower temperatures to the Northeast and much of the South eventually.
Most of the losses ranging from a little less than a nickel to a little more than 20 cents occurred in the West. The rest of the market was flat to about 20 cents higher, with the largest gains concentrated at Northeast citygates. The Florida citygate spike of a little more than 65 cents was an aberration; although Florida heat was due to ease a bit during the weekend, Florida Gas Transmission still kept an Overage Alert Day in effect Friday.
Although Nymex’s petroleum-related futures offerings recorded major losses, the December gas futures contract will provide only a modicum of negative support for Monday’s cash market after sinking only 1.7 cents (see related story).
PG&E issued a high-inventory OFO for Saturday (see Transportation Notes), which resulted in drops of about 15 cents each at the PG&E citygate and Malin.
Although still due to be pretty chilly Saturday, the Rockies was entering a warming trend that would erase most signs of the midweek blizzard over the weekend. And although much of Western Canada would continue to experience lows around freezing Saturday, the overall western forecast was generally mild.
A cold front was due to bring chillier conditions to much of the Midwest Saturday and also lower temperatures in the Northeast and most of the South during the weekend, but only a relatively small addition to heating load was expected to result.
A Midcontinent producer confessed that he didn’t “know what’s going on” with even modestly higher prices at most points Friday in light of overall moderate weather-based demand. He said he had been able to fix the November nominations cuts that he reported Wednesday.
The producer he thought said Wall Street greed had a lot to do with problems in the national economy and energy industry.
It was starting to get warmer again after a cold front had passed through his region on its way to the East, said a utility buyer in the western Midwest. Local conditions were continuing to look relatively mild through the first half of November, he said.
The buyer reported buying only one “small” November baseload package at Northern Natural Gas-demarc at index plus 0.5 cent. Winter-term agreements were kicking in for essentially all of the rest of his utility’s load, he said.
The National Weather Service predicted a broad swath of above-normal temperatures during the Nov. 5-9 period extending from the southern three-fourths of California through eastern Michigan in the north and most of Louisiana in the South (excluding normal conditions in the southern ends of California through Texas). It expected below-normal readings only from southern Alabama and the western end of the Florida Panhandle through eastern Tennessee and the western Carolinas.
The Baker Hughes Rotary Rig Count of drilling rigs actively searching for gas continued to rise by three to 728 in the week ending Oct. 30. The Gulf of Mexico tally was unchanged, but three more rigs were activated onshore, Baker Hughes said. Its latest count is 2% higher than a month ago but 53% less than the year-earlier level.
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