Forecasts of moderate to cool weather in many areas, the previous day’s 8.4-cent decline in November futures and the loss of industrial load over a weekend led to price declines at all but one point Friday. With Questar’s Clay Basin storage facility shut in for testing through the middle of this week, Rockies quotes once again took the biggest hits.
As it turned out, the Rockies point Northwest-South of Green River recorded the sole gain of about a nickel. It had seen a 95-cent plunge the day before, which was by far the largest of Thursday’s minority declines. Otherwise, Friday’s losses ranged from a little more than a nickel to a little more than 85 cents. Consumers Energy was the only retreating point failing to register a double-digit drop.
Despite the softness that dominated the market from Wednesday onward, all points ended the week with premiums of 37 cents or more to first-of-month indexes. All of the West except Stanfield remained more than a dollar above index.
Prices were softer for the weekend despite forecast extremes of highs topping out in the 50s near the Canadian border, lows near freezing in Western Canada and highs returning to near 90 in the western end of the South. Most other areas were expected to see temperatures that generated little in either heating or cooling load.
A Gulf Coast producer said he doesn’t expect prices to be able to rally Monday. Weather should still be fairly moderate for most people then, he said, but primarily it was the screen plunge of 33.3 cents Friday that will preclude a rebound.
A utility buyer in the Lower Midwest said her company had “a tiny bit” of heating load at midweek, and also saw a fair amount of power generation demand for running heat pumps. It had been warming up since then, though, so the heating load would be gone Saturday, she said. However, there’s a good chance of it returning this week as the area’s first frost of autumn should be getting close, she added.
The utility is “darn close” to full on storage, the buyer continued, but it has a little injection space left. It expects to easily top off its storage account by the end of October.
Despite Friday’s softness, a Midcontinent producer said his company is a bit bullish on prices heading into winter, but if there are “no signs of cold soon, watch out!” He also sees support for spot gas prices coming from recent record-high crude oil prices prompting more fuel switching. “If they can [switch from fuel oil to gas], they will!” he exclaimed.
The producer dismissed to some extent the general bearishness of late last week, noting that Midcontinent spot prices are still well over monthly index prices. And the six- to 10-day forecast “finally has some blue [below-normal temperatures] on it, so cash may hold,” he concluded.
©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 |