A tropical storm entered the Gulf of Mexico over the weekend as expected, but failed to have much impact on mixed cash pricing. Any related shut-ins of offshore production were expected to be minuscule as Tropical Storm Alberto was apparently pointed toward landfall near Tallahassee on the eastern end of the Florida Panhandle.
Many eastern numbers were close to flat, ranging from about a dime higher to a dime lower. However, the cooling effect that Alberto’s rains would have on the previously hot Florida market were showing up in Monday’s trading, with a Florida citygate quote down nearly a dollar and Florida Gas Zone 3 seeing the day’s biggest noncitygate drop of about 35 cents.
Meanwhile, prices rose at nearly all points in the West, a region that would seem least susceptible to tropical storm impacts on the market. But it was increased cooling load that was primarily responsible for western gains ranging from a little less than a nickel to a little more than 35 cents. High temperatures would remain well above average in the interior West, with 80s and 90s due in much of the Great Basin, according to The Weather Channel.
Meanwhile, very hot weather was on the light side elsewhere outside the South and central Plains. And some air conditioning load would be lost in the South as Alberto’s rains were due to cool off much of the region’s eastern end.
A spokeswoman for Minerals Management Service in New Orleans said nobody reported any Alberto-related shut-ins or platform evacuations to the federal agency Monday.
Prices fell by as much as a dime for one Gulf Coast producer at the mostly Louisiana points he trades. Initial quotes went up 3-4 cents at first before Alberto’s course was clear, but then trended steadily lower as it became apparent the storm would have very little impact on offshore production, he said, adding that late prices were as much as 15-20 cents below the daily average.
“There’s no storm hype in this market,” commented another source.
A Houston-based marketer also reported seeing lower prices in late trading, which often is an indicator of which way cash numbers will be moving on the following day. But noting that the screen, which had been slightly negative during most of Monday morning cash business, had eventually turned in a daily gain of just over a nickel, the marketer said he expected that to translate into a little bit more cash strength Tuesday. The “usual amount” of maintenance restrictions are in effect on pipelines for this time of year, but nothing extraordinary, he said.
NOVA Inventory Transfer (NIT) quotes were down nearly C10 cents after the giant Alberta pipeline reset imbalance tolerances Sunday to discourage system packing (see Transportation Notes). The normal tolerance range was restored Monday. Meanwhile, Westcoast Station 2 prices rose nearly C10 cents Monday but remained at a discount of nearly C35 cents below NIT levels.
A Florida utility buyer said her company was seeing no operational impact from Alberto “at this point” Monday afternoon. She agreed that her area needed rain badly and so it was glad to have Alberto paying a visit, rather than fearing its potential wind damage.
Florida was already starting to see some of the anticipated decline of cooling load from Tropical Storm Alberto’s rains over the weekend. Nominated flows for delivery in the Florida market area Sunday were down 75,000 MMBtu/d from Saturday levels, according to consulting firm Bentek Energy (https://intelligencepress.com/features/bentek/). However, nomination cuts for Sunday were even bigger at some other points covered by Bentek: the MichCon citygate, off 198,000 MMBtu/d from Saturday; Sumas, off 131,000 MMBtu/d; Malin, off 381,000 MMBtu/d; and the Southern California border, down a whopping 431,000 MMBtu/d.
MDA EarthSat Energy Weather gauged the potential threat to Gulf of Mexico production “at less than 10% related to Tropical Storm Alberto” Monday morning. “Alberto is located in the eastern part of the Gulf (toward Florida) and not in the prime production concentration of the central to western Gulf,” MDA Earthsat said. It agreed with news reports that Alberto will be a heavy rain producer for the central and northern parts of the state, and as such would be welcomed in a state suffering from extended drought and wildfire problems. Wind damage is not as much of a concern.
Although one news report said Devon Energy said was evacuating construction workers from a Gulf platform Sunday, no cuts of oil and gas output were expected. Another report quoted a BP spokeswoman as saying the company had taken no actions as a result of Alberto.
Citigroup analyst Tim Evans said Alberto was providing “at least a sideshow for the natural gas market” Monday, but it looked as if little if any production would be shut in. “Cooling degree days for this week look close to average, a step down from the same period last year,” Evans added.
At 4 p.m. CDT the center of Alberto was about 125 miles south of Apalachicola, FL and about 145 miles southwest of Cedar Key, FL, according to the National Hurricane Center (NHC). The storm was moving toward the north-northeast at nearly 10 mph and could be expected to continue that course for the next 24 hours, NHC said. Maximum sustained winds had increased to nearly 70 mph, giving Alberto the potential to become a hurricane (winds of 74 mph or greater) within the next 24 hours.
The federal agency’s projected tracking for Alberto had the storm making landfall somewhere south of Tallahassee, FL toward Tuesday evening and continuing through the Florida Panhandle into southeast Georgia by Wednesday morning and then along coastal South Carolina.
A hurricane warning was in effect for the Gulf Coast of Florida from Longboat Key to the Ochlockonee River. A tropical storm warning remained in effect south of Longboat Key to Englewood and west of the river to Indian Pass, NHC said.
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