Except for the direction of movement, Thursday’s price changes generally resembled those that opened the week. But this time the direction was down — way down — as the market bowed to approaching relief from a devastating heat wave in key northern markets and a slightly diminished threat of Tropical Storm Chris to the Gulf of Mexico production area.

Virtually all Northeast and Appalachian points, along with most of those in the Gulf Coast, saw quotes dive by a dollar or more. Tennessee Zone 6 topped the losses by falling nearly $1.60 (in the New England market it serves, Boston had slipped from an upper 90s high Wednesday to the low 90s Thursday and was predicted to not quite reach 80 Friday). Only a few Midcontinent/Midwest points and none of those in the West recorded triple-digit declines, but all fell by about 35 cents or more.

Actually a cold front had already cooled off much of the Midwest (Chicago went from a high Wednesday just short of 100 degrees to around 80 Thursday) and was due to bring cooling showers to the Northeast late Thursday night and to the Mid-Atlantic Friday, according to The Weather Channel. The South was expected to have one more sweltering day Friday before starting to get a break from the heat in the region’s eastern end, while the formerly sizzling West will remain close to seasonal temperatures in most areas.

As of Wednesday afternoon the National Hurricane Center’s (NHC) projected path for Chris still had it pointed straight into the Gulf between Cuba and the Florida Keys and largely avoiding contact with land masses except for some of the Bahamas islands.

But on Thursday the agency thought the storm might graze the northern edge of Cuba, which would tend to sap some more strength from an already weakened Chris. NHC also expected Chris to take a more westerly course than before, which would keep it a little farther to the south of the production area. However, the storm is likely to be approaching deepwater operations by Tuesday morning, NHC said, so platform evacuations and shut-ins are still a probability.

At 5 p.m. AST Chris was at marginal tropical storm strength with sustained winds around 40 mph (the threshold for tropical storm status is 39 mph), and NHC expected it to weaken into a depression later Thursday night or early Friday. The center was about 195 miles east-southeast of Grand Turk Island and moving west-northwest at 10 mph.

Weather 2000 issued a cautionary note. “Please note that the recent weakening of Tropical Storm Chris does not preclude this storm from rebounding to hurricane status at some point in the future, nor does it preclude the storm from entering the Gulf of Mexico,” the consulting firm said. “The storm could even dissipate to the point of being completely declassified, but then regenerate days later, so please do not mentally ‘bury’ this storm until the weekend comes and goes.

“As a dramatic example, many people forget that Hurricane Katrina actually began its life as Tropical Depression 10 (east of the Lesser Antilles), dissipated to the point of declassification, only to become reborn in the Bahamian waters days later.”

Citigroup analyst Tim Evans said while the updated Colorado State University hurricane forecast (see related story) “does represent a step down from prior forecasts, we note it is not anything like an all-clear. There are still seven hurricanes in this outlook and we have yet to see one, implying that we still have the entire seven to go through. It is unlikely that they would all target the Gulf of Mexico, but it seems equally unlikely that they would all miss. The bottom line is that plenty of hurricane risk still remains, whether Tropical Storm Chris remains an issue or not.”

Unless Chris’ threat to the Gulf of Mexico production area grows again substantially, it’s unlikely that prices will be able to rally Friday after the screen retreated by just over half a dollar Thursday, joining Nymex’s petroleum-based futures offerings in softness. The heat wave that has plagued most of the U.S. and Eastern Canada recently largely will have been broken over the weekend, and the usual drop of industrial load during a weekend will be a factor.

Storage avoided a second consecutive week of an unprecedented midsummer withdrawal when the Energy Information Administration estimated a 19 Bcf injection for the week ending July 28. The volume was a fairly good match with consensus expectations. However, the extreme heat in the East this week has some analysts suspecting that another pull may show up in next week’s report.

It’s cooled down in the Midwest, but a Calgary-based producer said he was still seeing “some decent load” at the Chicago citygate. It’s not as “extreme” as earlier in the week, of course, he added. Despite Thursday’s big drops, he said he feels that cash prices are still relatively strong in relation to September futures, noting that although Henry Hub plummeted more than a dollar into the low $7.60s, that still was about 30 cents above where the screen settled. The market was pretty hectic earlier this week with the super-high power generation load in the Midwest and Northeast, he said, but Thursday was fairly quiet.

But for a western marketer, Thursday continued to be “crazy with the Nymex going all over the place.” Prices on Northwest from the Rockies going northward made for a good spread, with Rockies supply cheaper than that at Sumas, which despite a drop of about 70 cents was rising in late deals, he said. The reason was that Northwest is taking its Plymouth Station storage facility meter to zero Friday, he said.

The marketer said he was seeing demand starting to dry up, especially at the Southern California border, now that more seasonable weather has returned to the West. Bentek Energy supported his contention about the border, saying flows there Thursday had fallen by a whopping 248,000 MMBtu/d from the day before (https://intelligencepress.com/features/bentek/).

He said he was “going out on a limb” in predicting that Chris is not going to have much impact in forcing offshore shut-ins, “although a later one might.”

The marketer doesn’t expect any trading to occur at Opal Monday because operator Williams Field Services has scheduled a total shutdown of the Opal Plat for Tuesday (see Daily GPI, July 17). That shouldn’t affect his company very much because “we don’t rely heavily on Opal,” he added. Also, it can use other Kern River receipt points and Questar are viable alternatives, he said.

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