November natural gas weakened again Friday as traders digested reports of additional drilling for natural gas and a production dynamic that continues to point to greater output. At the close November had fallen 8.1 cents to $3.666 and December had given up 5.3 cents to $3.962. November crude oil retreated $2.94 to $79.20/bbl.
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Industry Brief
Natural gas utility rates in Nevada have dropped again, marking a 30% decrease since January 2009. Electric rates also decreased, and NV Energy attributed both retail utility rate drops to a combination of factors, with lower wholesale natural gas costs being a major one. With a 10.72% decrease in retail gas rates for its northern Nevada customers, the utility said the average monthly gas bill for residential customers will be more than $22 less than it was in 2009. “Adding today’s decreases will roll back total natural gas prices to 2001 levels and total electric utility prices to 2004,” NV Energy said. Factors driving the downward trend besides lower wholesale gas prices are a new state-of-art combined-cycle gas-fired generation plant, a broader, more gas-fired utility owned generation fleet and a decline in energy costs generally.
Expected Hefty Storage Builds Lean on Futures; October Slides
October natural gas fell again in uninspired trading that saw traders ascribe the losses to more mild weather patterns. October dropped 6.8 cents to $3.730 and November fell 6.5 cents to $3.820. November crude oil lost $1.00 to $85.92/bbl.
LNG Could Be a Marcellus Market, Say Analysts
The current spread between U.S. and European/Asian natural gas prices supports export of liquefied domestic gas from the Lower 48, but it’s likely too uncertain to support the long-term, billion-dollar commitment needed to bring large-scale liquefaction to the U.S. Gulf Coast, according to an analysis by Pan EurAsian Enterprises Inc. released Monday.
Back to the Future with the Pony Express Pipeline
It’s deja vu all over again as Kinder Morgan floats a proposal to convert a 635-mile Wyoming to Missouri section of its former Pony Express Pipeline from natural gas back to its original function of carrying crude oil. Chalk it up to the booming oil development in the Bakken and the Denver-Julesburg/Niobrara shales and a shrinking demand for Rockies gas in the East.
Back to the Future with the Pony Express Pipeline
It’s deja vu all over again as Kinder Morgan floats a proposal to convert a 635-mile Wyoming to Missouri section of its former Pony Express Pipeline from natural gas back to its original function of carrying crude oil. Chalk it up to the booming oil development in the Bakken and the Denver-Julesburg/Niobrara shales and a shrinking demand for Rockies gas in the East.
Mixed Price Moves Include Some Eastern Softness
There was a new tropical storm in town Tuesday, but it failed to impact the gas market. Prices again were flat to slightly higher in most cases as forecasts remained hot in many areas but were easing downward in such key consuming regions as the Northeast and Midwest. The previous day’s 4.3-cent futures gain helped keep a floor under much of the market.
Growing Storm Threat, Heat Spur Mild Gains
Prices were in modest rally mode at a large majority of points Wednesday as heat levels began to trend upward again in key northern market areas and what had previously appeared to be a benign tropical wave south of Cuba was designated as Tropical Storm Don in the afternoon as it headed into the Gulf of Mexico.
EIA Production Forecast Reflects Shales’ Contribution
The promise of continued production growth from unconventional gas plays — shales in particular — has been repeated yet again in the Energy Information Administration’s (EIA) latest production forecast. While the overall gas-directed rig count has fallen, the number of rigs targeting unconventional plays (gas and oil) has increased from last year.
Pennsylvania to Hold Marcellus Meetings
Pennsylvania Lt. Gov. Jim Cawley (R) announced Thursday that four working groups created by the Marcellus Shale Advisory Commission will meet beginning on Monday (April 11).