Prices rose moderately in most of the cash market Monday despite generally mild weather forecasts, but for the third week in a row quotes plunged to sub-dollar levels in the Rockies. A series of pre-dawn explosions on several gas pipelines in Mexico helped stoke some bullish sentiment as U.S. gas may be called upon to help replace Mexican supply shortfalls, although the U.S. export capability is limited (see related story).
Most points ranged from flat to nearly a quarter higher. The Florida citygate and Florida Gas Zone 3 joined the Rockies and Westcoast Station 2 in seeing losses running as high as about $1.35.
Bottom-end quotes dropped as low as 20 cents for Cheyenne Hub, CIG and Northwest-domestic, while Opal, Kern River and Northwest-South of Green River recorded lows of 25 cents, 30 cents and 40 cents, respectively. CIG and Cheyenne Hub were able to manage averages of about a quarter each.
The reason for the Rockies price debacle was unchanged from the past two weeks and on occasion earlier this year: the region has relatively little pipeline takeaway capacity for the size of its production, and limited storage opportunities have been aggravated by several area pipelines ordering the emptying of interruptible storage accounts recently. In addition, maintenance constraints have come back into play again as Northwest will take capacity of its Pleasant View and La Plata B compressor stations to zero from Tuesday through Thursday this week (see Daily GPI, Sept. 10).
El Paso’s two San Juan Basin pools recorded some of Monday’s largest increases as triple-digit high temperatures have returned to the desert Southwest.
A low-pressure area in the Atlantic developed into Tropical Storm Gabrielle over the weekend but had no significance for the gas market as it never made landfall and was fading as it headed northeastward into the North Atlantic Monday as a downgraded tropical depression. Gabrielle might have accomplished some demand destruction if had come ashore on the East Coast, but its cooling rains only made it as far as the coast of the Carolinas.
The cash market will have plenty of prior-day futures support Wednesday after Nymex traders sent the October contract 39 cents higher Monday in reaction to the Mexican explosions and a pickup in Atlantic tropical acitivity.
A leftist rebel group claimed responsibility for the explosions in the Mexican east coast state of Veracruz that could be felt as much as 12 miles away. Tennessee is believed to be the only U.S. pipe in Texas that is currently flowing U.S. gas to Mexico.
The weather picture is looking pretty bearish from the coming weekend into early next week. In its six-to-10-day forecast posted Sunday, the National Weather Service looks for below normal-temperatures during the Sept. 15-19 period in approximately the entire eastern two-thirds of the U.S. except for Maine, where it expects normal conditions. Above-normal reading are predicted for nearly everywhere from the Rocky Mountains westward, with the exception being a wide swath along the coast in northern and central California.
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