The pace of returning Gulf of Mexico and Gulf Coast gas production appeared to have quickened over the weekend, and gas futures and cash prices reflected that trend in light trading on Columbus Day (Thanksgiving Day in Canada). Cash points tumbled between a nickel and 30 cents in the Northeast, 15-45 cents in the Gulf Coast, and 10-55 cents in the Midwest and Midcontinent.

The southern and central Rockies were hit with heavy wet snows and falling temperatures on Monday. Western markets gained between a nickel and a dime and ranged from the $10.20s at central Rockies points to the $11.20s at PG&E Citygate.

Golden, CO-based consulting firm Bentek Energy reported that Gulf gas production (onshore and offshore) rose about 500 MMcf/d over the weekend to 7,391 MMcf/d (The Minerals Management Service did not report shut in statistics Monday because of Columbus Day). Bentek, which collects data on daily gas production nominations from gas pipeline bulletin boards, said Gulf production shut-ins totaled 6,429 MMcf/d Monday compared to 6,931 MMcf/d on Friday. Over the last week, more than 1.7 Bcf/d of gas production has returned to service, according to Bentek’s data.

Shut-ins of 1,755 MMcf/d upstream of Tennessee Gas onshore and offshore Louisiana still dwarf the volumes shut in behind other pipeline systems. The next largest total is upstream of Tennessee’s sister company, Southern Natural, with 834 MMcf/d, followed by Transco with 625 MMcf/d, Mississippi Canyon with 511 MMcf/d, Texas Eastern with 415 MMcf/d and Sea Robin with 386 MMcf/d. There is still no gas production scheduled to flow on Sea Robin, Mississippi Canyon, High Island, Stingray or Sabine.

“Tennessee still has extensive processing and pipeline damage on its 500 line and has a lot of gas shut in on its system,” noted a Northeast utility buyer. “We are starting to line up some winter alternatives to take care of that, quite honestly. We are buying more [market] delivered gas. We’re looking at Canadian gas alternatives. There are some options we have with our long-haul capacity. We’re looking at a lot of different things right now to make sure we don’t have any issues heading into the winter.

“We’ve been backing off of our daily purchases because we’ve been buying a lot from Canada and a lot of that stuff is not getting through because of high nominations on Tennessee at Niagara. Luckily our storage is in pretty good shape right now.”

He said South Texas prices were down 10-30 cents Monday. “I bought some Texas Gas Zone 0 for $11.19 late but it was $11.28 early on. It was coming down the whole session. I did $12.75 at Niagara, which was quite a bit weaker than weekend levels.”

In New England, generators are expecting to see high temperatures 5-10 degrees below seasonal levels and that means 60s in the daytime. Low temperatures, however, are expected to be several degrees above normal. “We’re looking at light loads and lower prices,” said a regional marketer. “I don’t think we’ll see much market activity this week aside for the normal gyrations in fixed prices because of Nymex and guys trying to line up their winter business.

“Prices were not that much different today in New England than what we saw for the weekend, maybe off 5-10 cents,” he said. “We’re starting to see more gas finding its way into the Gulf so I don’t see a lot of fundamental support for these price levels going forward.”

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