Cash gas prices joined an overall rally in the stock and commodities markets Tuesday with flat to higher showings at all locations. Fundamentals didn’t seem to justify the modest strength as forecasts were seasonal for early August or slightly cooler in many areas, but there was no denying that buyers dominated Tuesday trading.
After leading the previous day’s upticks handily, Northeast citygates blended back into the overall market pack amid quotes ranging from flat to about a dime higher. Only a few points achieved gains exceeding single digits.
Amid an overall rebound in stock and commodities markets, Nymex will provide support for Wednesday’s cash trading after the prompt-month gas futures contract recorded a 5.9-cent rally (see related story).
The general price strength was a bit puzzling since forecast highs of 100 or higher were getting scarce outside the desert Southwest through Oklahoma-Texas corridor, and the key market areas of the Midwest and Northeast could expect to peak Wednesday mostly between the mid 70s and mid 80s. And most locations in the South aren’t due to exceed seasonal peaks in the mid 90s.
The remnants of Tropical Storm Emily were about 715 miles east-northeast of Bermuda Tuesday afternoon, the National Hurricane Center said, and had only a 10% chance of regenerating while continuing to move northeastward into the open Atlantic. No other systems were of particular interest Tuesday, the agency said.
After linepack returned to normal on Westcoast, Station 2 pricing commanded the low end of the market with numbers barely under C$3.
The CIG-Henry Hub basis spread was steady at just over a quarter.
Tennessee’s Imbalance Warning in market-area Zones 5 and 6 along with Southern’s capacity allocations for two east-end delivery groups remained the only somewhat-significant transport constraints.
Northern Natural Gas signaled the lack of cooling load in the Upper Midwest by saying that compared with its normal system-weighted temperature of 72 at this time of year, the average was projected to be 67 both Tuesday and Wednesday before returning to near normal around Thursday.
Stephen Smith of Stephen Smith Energy Associates said he anticipated a storage build of 38 Bcf for the week ending Aug. 5, up a bit from his original estimate of 36 Bcf. Credit Suisse’s Stefan Revielle looks for a smaller addition of 35 Bcf.
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