Somewhat improbably, the cash market built upon Friday’s modest gains, which came amidst mixed price moves, with a fairly strong advance across the board Monday. The return of industrial load from its weekend dip was a minor bullish factor, but otherwise reasons for Monday’s upticks were difficult to discern.
There were no significant increases in either heating or cooling load in the forecasts — indeed, the Northeast can expect even milder conditions Tuesday — while tropical threats remained nonexistent and Friday’s drop of 0.4 cent by October futures certainly provided no support.
Nevertheless, only a flat ANR ML-7 was left out of gains ranging from a couple of pennies to 20 cents or so. Even with Northeast highs dropping back into the 70s Tuesday, regional citygates tended to see the lion’s share of double-digit upticks.
Despite Houston-area highs reaching the low to mid 90s for most of this week, the Katy Hub and Houston Ship Channel joined Midwest citygates in recording most of the smallest increases.
Cash numbers had no prior trading day support from Nymex Monday, but they will have a leg up in Tuesday’s activity after the prompt-month gas contract began its three-day countdown to expiration with an advance of 8.1 cents (see related story).
Former Tropical Storm Ophelia had weakened to a “remnant low” early Sunday north of the Leeward Islands, the National Hurricane Center (NHC) said as it issued its final advisory on the system. However, on Monday NHC was giving 20% odds on Ophelia’s residue regenerating into a tropical cyclone within 48 hours.
As the agency approached the end of the naming alphabet with two months left to go in the 2011 Atlantic season, Tropical Storm Philippe was designated over the weekend but appeared destined to go no farther westward than the central Atlantic.
The main repositories of significant air conditioning load largely were unchanged from previous weeks: Florida and Texas-Louisiana through the desert Southwest. But the Southern California market was reheating, with the AccuWeather.com report on Kern River’s bulletin board projecting Los Angeles and suburban Burbank highs climbing into the upper 80s Tuesday and Wednesday.
Elsewhere, forecasts were for moderate to cool weather to dominate the overall picture, with a rainy Northeast and the Rockies due to cool off even further.
After getting some relief from high linepack going into the weekend, Westcoast said system inventory was climbing toward excessive levels again Monday. PG&E also said it was experiencing high system inventory Monday, although it did not vary from its long-running Stage 1 OFO with a narrow tolerance band for imbalances.
A Rockies producer welcomed FERC’s OK of Kern River’s Apex Expansion Project (see related story), noting that the pipeline said the in-service date for Apex could come as early as Oct. 1.
Initial bidweek trading at the Chicago citygate on the IntercontinentalExchange (ICE) platform averaged $3.91, which represents a nickel drop from NGI‘s first-of-month index for September.
A western trader said he was just watching the ICE numbers Monday to see what develops in October business and probably will do his bidweek deals Tuesday and/or Wednesday. He perceived many traders as being a little shy about making early bidweek commitments because the ICE volumes were generally small Monday, adding that he expects a lot more transaction volume Tuesday and Wednesday.
Following the previous week’s big jump of 20 rigs to 912 engaged in gas-directed drilling activity, the Baker Hughes Rotary Rig Count found no change for the week ending Sept. 23. An addition of one unit in the Gulf of Mexico was offset by the subtraction of one onshore, Baker Hughes said. Its most recent tally is 2% higher than a month ago but down 6% from the year-earlier level.
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