In trading for flows through the end of September, prices fell at all points Thursday as the continuing transition to seasonal autumn weather combined with abundant storage levels put further negative pressure on the cash market. The incorporation of the usual loss of industrial load over a weekend was another bearish influence, as was the absence of any near-term tropical storm threats to Gulf of Mexico production.
Rockies producers were singing the “Less Than a Dollar” blues once again as they saw the largest losses by far among overall declines that ranged from a little less than a dime to about a dollar. CIG and Cheyenne Hub bottomed out at a nickel each. Questar was the only Rockies point to average a little more than a dollar Thursday.
The Rockies market, which had managed to participate in an all-points rally Tuesday, was succumbing again to the relative lack of transport and storage capacity that have long plagued the region. There is the ongoing partial outage of the Cheyenne Plains system, a key conduit for moving gas eastward from the Rockies, which is flowing about 58% of the 780 MMcf/d normal capacity available prior to a Sept. 16 fire at the Cheyenne Plains Compressor Station. Northwest continues to have significant maintenance constraints on northbound flows, and traders may have been looking ahead to a bottom-hole test outage of the Jackson Prairie storage facility next week (see Transportation Notes).
Also weighing down on Rockies pricing is Questar’s requirement that interruptible storage accounts be emptied (see Daily GPI, Sept. 10). CIG has mandated a more limited withdrawal of interruptible storage in association with an OFO prompted by near-full inventories at its fields (see Daily GPI, Sept. 12).
Cheyenne Plains is proceeding with repair plans for its fire-damaged Cheyenne Plains Compressor Station but estimated that full service on its system will not be restored until mid-November (see Transportation Notes).
The Northeast, which had seen a moderate heat wave last through Wednesday, will continue making a rapid retreat into cooler conditions. New York City and Boston, expected to top out in the mid 80s Thursday, are forecast to see their highs drop another 10 degrees or so Friday. The Midwest, which was already rather chilly due to a cold front, will see that front move on into the Northeast Friday.
The South is fairly moderate also, with only a few cities expected to get above the mid 80s Friday. And a series of three Pacific cold fronts will move through the West over the next five days, according to The Weather Channel.
Tropical Depression 13 strengthened into Tropical Storm Lorenzo Thursday but remained on track for a Mexican landfall Friday far south of the Texas border. And Tropical Storm Karen continued to look like it might not menace any land mass other than possibly Bermuda.
The Energy Information Administration hit consensus expectations squarely on the head in announcing a 74 Bcf addition to storage during the week ending Sept. 21. The further proof that inventories are in line to end the injection season at record levels led Nymex traders to send November futures 12.7 cents lower in the contract’s prompt-month debut. The slide in natural gas futures was in sharp contrast to the strength in November crude oil, which spiked by $2.58 to $82.88/bbl.
Prices into Florida Gas Transmission and the Florida citygate continued to sink despite the pipeline extending an Overage Alert Day through at least Thursday. Florida Gas Zone 2 led production-area declines by falling a quarter.
Large increases in October first-of-month indexes are expected after the October futures contract went off the board Wednesday at $6.423, or 99.3 cents above the September settlement.
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