Prices continued to ignore mostly moderate weather in registering small gains at most points Thursday. The previous day’s 5.5-cent increase by expiring May futures played a role in the general cash firmness, as did temperatures reaching the low to mid 80s in much of the South.
Most points were flat to about a dime higher. A few locations saw losses ranging from about 2 cents to about C19 cents, with the Alberta export point of Empress seeing the largest decline.
The Energy Information Administration’s report of an 83 Bcf addition to storage during the week ending April 23 handily exceeded consensus expectations in the low to mid 70s Bcf. The bearish implications were hard to ignore, as Nymex traders demonstrated in sending the new prompt-month June futures contract 36.8 cents lower. Another bearish factor was the EIA revision of previous production not being as high as previously expected (see related story).
The big futures loss, combined with cool to warm weather forecasts for most of the U.S. and the typical weekend loss of industrial load, portend significant softness in Friday’s cash market.
After belatedly announcing a high-linepack OFO for Wednesday early that morning, SoCalGas did not extend it into Thursday. The SoCal citygate and Southern California border were both up about a nickel in response.
A Midcontinent producer said most of his company’s gas is locked into long-term contracts, “so we just do what we can” with the rest. Most of the available spot gas can enter either OGT or NGPL-Midcontinent after going through processing plants, he said, so the company generally sells into OGT because it continues to command a premium over the NGPL point.
The producer said he expects most Midcontinent indexes to be around $4, adding that he sold gas Thursday for May into OGT at $4.035 and bought into NGPL-Midcontinent at $3.965.
A utility buyer in the South said maintenance on Trunkline would be constraining most of his normal supply from South Texas throughout May, but otherwise transportation was smooth. He reported having already finished all of his bidweek business near the end of last week.
Local temperatures were in the cooling stage, a Midwest utility buyer said, but he did not expect any significant heating load to result. He cited adequate term contracts for not buying any baseload gas for May.
After futures tanked Thursday, a Midcontinent producer said he was seeing NGPL-Midcontinent and TexOk numbers trading at index minus 6 cents. Unfortunately, he said, he had already had finished making May purchases before the prices turned downward. Oklahoma temperatures have been getting into the 80s recently, so he said he wouldn’t be surprised if some air conditioning load started to develop.
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