Prices fell at most points Friday due to cool but relatively mild weekend weather being predicted across the southern third of the U.S., a small prior-day futures decline and the dropoff of industrial load over a weekend. Northeast citygates, forecast to see sub-freezing lows Saturday, realized gains of up to nearly 75 cents. Three flat points in the Midcontinent/Midwest also were exceptions to the overall softness.
Losses ranging from a little less than a nickel to about 85 cents tended to be greatest in the Rockies/San Juan Basin market. Sumas saw the day’s biggest plunge despite Northwest keeping an OFO in place north of the Kemmerer (WY) Compressor Station.
Weekend highs above 70 degrees were surfacing at several locations in the South from Montgomery, AL, westward, although the region’s eastern end would still be limited to the 60s. Most Midwest citygates fell by a little more than a dime despite having lows around freezing in the forecast. Although the weather picture was the same in the Rockies, prices fell by even larger amounts there as previous supply shortfalls began to be resolved.
Kern River said it had returned to normal linepack systemwide Friday, and a 20% reduction of Opal Plant output was expected to end by early Sunday. Also, PG&E ended a customer-specific low-inventory OFO Saturday.
Transco Zone 6 (non-New York City) topped out at $11; however, most deals there were done toward the $8.10 low end of the trading range as the point averaged in the low $8.80s. Other quadruple-digit peaks were recorded by Algonquin citygate ($10), Iroquois Zone 2 ($10.10) and Transco Zone 6-NYC ($10.50).
“It’s really winter now,” said a Northeast utility buyer who said it was snowing in his area Friday and temperatures would stay below freezing during the weekend. He noted that the market got a “clean break” with Dec. 1 falling on Saturday, so there would be no weekend transition between months, avoiding the complication of divided weekend flows.
Calling it a “routine bidweek,” the buyer said he made only a few December baseload purchases and expected to need only modest storage withdrawals to supplement the company’s winter term contracts. He looks for slightly cheaper first-of-month indexes, noting that the December futures settlement of $7.203 was 6.6 cents below the November closeout.
A Florida utility buyer said it was actually warm enough in the Sunshine State for gas to see a little bit of cooling load (the Saturday high in Orlando was expected to be just shy of 80 degrees). He reported buying December gas at basis of minus 35 cents at Florida Gas Zone 1 in South Texas and other Zone 1 gas in far west Louisiana at minus 7-4 cents. Bidweek supplies were readily available, he said, with no haggling necessary. Basis tended to strengthen as bidweek went on due to screen weakness, he said.
One source noted that expansion work is scheduled starting Tuesday on NGPL’s Louisiana Line and will run through Dec. 9. Station 302 will be unavailable for the duration of that work, while Station 342 will be unavailable from Tuesday through Thursday. The capacity reductions in Louisiana may give a boost to prices in NGPL’s downstream TexOk zone, he said.
©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 |