The odds seemed stacked against a cash price rally following Friday’s November futures decline of 11.7 cents and mild to cool temperatures continuing to dominate the overall post-weekend weather forecasts. But somehow the market managed to pull it off, although the restoration of industrial demand from its usual weekend dropoff was only a marginal bullish factor.
A few flat to as much as 15 cents lower locations constituted the exceptions to gains ranging from 2-3 cents to nearly $1.15. The dollar-plus spike on Line 300 in Tennessee Zone 4 (where quotes still bottomed out at the market low of $1.40) was something of an aberration as other increases were limited to a little more than 20 cents.
Line 300 in Zone 6 was also a ways off the market’s beaten path as its drop of about 15 cents handily exceeded other losses that were no more than a couple of pennies.
Cash quotes weren’t the only things rebounding. After starting Monday slightly in the red, prompt-month futures recovered enough to post a 6-cent gain on the day (see related story), promising moderate support for Tuesday’s cash trading.
Tropical Storm Philippe (briefly a hurricane) dissipated over the weekend. The only remaining activity on the National Hurricane Center’s monitoring map Monday was an inland low-pressure area over much of north-central Florida and part of southern Georgia. With the system expected to remain over land, it rated only a 10% chance of developing into a subtropical cyclone within 48 hours.
Despite Henry Hub realizing a small price gain, volumes traded there on IntercontinentalExchange plummeted from 1,248,500 MMBtu Friday to a mere 819,300 MMBtu Monday.
Granted, there were a few warming trends under way Monday, but other than returns to highs in the upper 80s for parts of Florida, Louisiana and Texas and to the mid 90s in the Phoenix area after getting down to the mid 70s briefly late last week, they looked unlikely to have any significant impact on boosting cooling load. Most of the rest of the South will stay capped in the 80 area, while a few sections of the Northeast and Midwest can expect to surpass the pleasantly mild mid 70s. The Kern River bulletin board’s AccuWeather.com forecasts coastal Southern California heading toward the upper 80s, but otherwise cool to chilly conditions will reign from inland California and the Rockies through the Pacific Northwest into Western Canada.
Rockies producers got some welcome news on takeaway capabilities during the weekend when Bison Pipeline announced getting the go-ahead to return to maximum capacity of 477 MMcf/d for the first time since a July 20 rupture, although it expects throughput to be 360-370 MMcf/d at first (see Transportation Notes). Available Bison volumes had been limited to 230,000 Dth/d (see Daily GPI, Sept. 22) while the pipe awaited approval to restore normal pressure.
The CIG-Henry Hub basis spread of 54 cents Friday (CIG averaging $2.86 while Henry was at $3.40) narrowed by about 20 cents, with a big gain by CIG doing nearly all of the heavy lifting while Hub numbers were close to stagnant.
A Rockies producer said he expected the return of Bison and the resumption Thursday of nomination injections at Questar’s Clay Basin storage facility (see Daily GPI, Oct. 10) following reservoir testing to further narrow the CIG-Henry gap. “Beats me” was his response when asked about Monday’s overall price rally in the face of mostly bearish fundamentals, but he suggested that more switching from coal to gas-fired power generation may have been a plausible cause.
Northern Natural Gas indicated that currently above-normal temperatures in the Upper Midwest will become more seasonal before the end of the week. A bulletin board posting about Northern’s normal system-weighted temperature of 52 at this time of year projected that the average will be rising from 63 Monday to 65 Tuesday before retreating to 59 Wednesday and 52 Thursday.
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