As expected, the prior-day spike of 28 cents by August futures and prospects for warm-to-hot weekend temperatures in much of North America generated gains in cash prices at virtually all points Friday.
The Florida citygate’s retreat of about 80 cents, despite Florida Gas Transmission extending an Overage Alert Day through at least Friday, was the glaring exception to overall firmness. Otherwise, gains ranged from a couple of pennies to nearly 30 cents, with only a few western points failing to surpass a dime.
Saturday highs on either side of 90 or greater would be the norm for most of the U.S., the Weather Central said, while lower Canada could expect peaks from the mid 70s to low 80s. Even Boston was due to slightly exceed 90, it said.
Nymex traders gave back a little of Thursday’s 28-cent spike in sending the August futures contract 6.7 cents lower Friday (see related story).
A tropical wave off West Africa had faded from the Natural Hurricane Center’s monitoring system Friday, replaced by a broad area of low pressure over the southwestern Caribbean Sea northeast of Central America. However, similar to the tropical wave, as of Friday NHC accorded the Caribbean system only a low (10%) chance of becoming a tropical cyclone during the next 48 hours.
Despite prices into Columbia Gas (TCO) rising more than 20 cents for the weekend, TCO volumes traded on the IntercontinentalExchange online platform took a huge drop from 1,143,500 MMBtu Thursday to only 775,200 MMBtu Friday.
A utility buyer in the South said increased humidity tended to cancel out forecasts of slightly lower weekend temperatures in his area. Of course, August temperatures are usually the hottest of the year, he said, “but we’re not there yet.”
The buyer said his company is getting close to full on storage and will ramp down to 37 MMcf/d injections in August and expects to be at maximum capacity by the end of the month. There was no concern in any case, he said, because the utility has been “already hedged on storage since last winter.” Panhandle Eastern maintenance continues to restrict nominations on that pipe by 10%, he said.
A Midcontinent producer said he didn’t have time to talk because of dealing with nominations cuts on the regional intrastate pipes due to processing plant maintenance.
A Midwest utility buyer said his company’s generation load was up Friday because it would be “hot here this weekend.”
SunTrust Robinson Humphrey (STRH) analysts said Canadian storage had increased by 13 Bcf to 470 Bcf during the week ending July 9, marking the 12th consecutive week in which north-of-the-border additions were below year-ago levels. “Canadian natural gas inventories are now 3% below last year and 16% above the five-year average,” said STRH.
The number of drilling rigs seeking natural gas in the U.S. jumped by 15 to 979 in the week ending July 16, according to the Baker Hughes Rotary Rig Count. Two more rigs departed the Gulf of Mexico, but that was more than offset by 17 rigs joining the onshore search. The latest Baker Hughes tally was up 3% from a month ago and 47% above the year-earlier count.
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