Overall physical natural gas prices jumped more than a nickel Monday as the specter of closed nuclear plants loomed over the market and eastern traders braced for the onslaught from Hurricane Sandy. The expiring November natural gas futures contract joined the stronger cash and went off of the board at $3.471, up 7.1 cents from Thursday. December futures added 7.9 cents on the day to close at $3.803.

In the early going northeast marketers reported no additional sales for power generation required by shuttered nuclear plants. “Business is getting done as usual. There is not really any increase in volumes,” said an East Coast marketer.

He added that electric loads were normal, and as of 1 p.m. EDT there were no additional nuclear outages. Although severe storms will often result in decreased demand for power due to less extreme temperatures and physical damage, the present roster of nuclear plants is thin. According to the NGI Power Reactor Status Report, there are a whopping 35 nuclear plants shown as either offline or producing at less than 100% of full power. The 35 nuclear plants’ generation represents a loss of 25,237 MW, or 25%, out of total U.S. capacity of 100,900 MW generated from 104 facilities.

A Reuters report hinted that some nuclear plants may be shut down. Primary candidates include the 2,332 MW Salem and 1,161 MW Hope Creek facilities in New Jersey, as well as plants in Maryland and Pennsylvania.

Early results showed that the reaction at eastern points was mixed with the strongest gains at Mid-Atlantic points. Quotes on Tetco M-3 rose more than a dime, as did deliveries into Transco Zone 6 New York. Tuesday gas on Dominion, however, added less than a nickel.

Quotes at the Algonquin Citygates rose a couple of cents, but Tuesday deliveries to Iroquois Waddington jumped more than a dime. Buyers on Tennessee Zone 6 200 L were able to pick up Tuesday gas about a nickel less.

Of concern to Northeast traders were potential pipe or compressor outages brought on by Hurricane Sandy’s landfall. Two compressor stations have been shut down on Texas Eastern Transmission due to Hurricane Sandy, one in Suffern, NY and the other in Lambertville, NJ, a spokesperson for Spectra Energy said Monday (see related story).

The Lambertville compressor is located where the two parallel main branches of the Texas Eastern pipeline system merge into a single path toward New York City. This is also the connection point between the Texas Eastern and Algonquin Gas Transmission systems.

Midwest points reported double-digit gains. Tuesday gas at Chicago Citygate roared ahead close to 20 cents, and deliveries on Alliance jumped about 20 cents as well. Gas on Michcon rose more than a dime, and deliveries on Consumers added almost 20 cents.

Trading in the expiring November contract was higher all day Monday. Although floor trading operations were terminated due to evacuations required in response to Hurricane Sandy, both futures and options trading continued electronically on the CME Globex and Clearport platforms. Under normal trading circumstances, floor trading in both futures and options continues for natural gas, but with the greater volumes conducted electronically the future of floor trading is uncertain. Even complex options trades can be conducted electronically through third-party platforms and cleared on the exchanges, traders report.

Hurricane Sandy is a huge threat to the eastern U.S., but once it clears forecasters are not getting a very focused picture in the near term. Monday morning the National Hurricane Center reported Sandy was about 310 miles south-southeast of New York City and was heading to the north-northwest at 20 mph. Sandy was holding 85 mph winds and was expected to make landfall along the Mid-Atlantic states Monday evening.

Equities weakened globally and gasoline rose as Hurricane Sandy threatened U.S. East coast refineries and closed stock exchanges. Floor trading at Nymex was canceled, but CME Globex and Clearport trading continued at their usual times.

In its 11- to 15-day outlook, Commodity Weather Group shows below-normal temperatures in the northern Great Plains and Pacific Northwest and also along the coastal Carolinas. All other sections of the country were expected to be normal.

“Once we get beyond the Sandy storm this week, the models are showing a less-than-clear pattern situation. The blocking pattern continues from the Hudson Bay over to the Greenland and northwest Atlantic area through the two-week forecast window on the guidance,” said Matt Rogers, president of the firm.

“This feature should prevent any major warm patterns from dominating the eastern two-thirds of the U.S. However, on the Pacific side, the lack of significant ridging toward the West Coast or across the Alaskan gulf means a strong cold air connection is also not present. The Euro and American ensembles show some ridging returning to Alaska late in the 11-15, which could trigger a stronger cool push, but confidence is very low at this early stage.”

November natural gas fell 21.7 cents last week but seemed unable to inspire follow-through selling nor any great level of buying interest. Mike DeVooght, president of DEVO Capital, noted that “Many of the commodity markets have been soft over the past couple weeks. Fundamentally the gas market continues to be uninspiring. We believe the $3.75-4.00 for the balance of the winter strip represents an attractive sell level for producers,” he said in a weekend note to clients.

He counsels end users and trading accounts to stand aside and producers should “hold short the winters strip at $3.75-3.95. Continue to sell any winter months above $3.75-3.95 (light position).”

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