Arrive

Spring will be warmer than usual in most of the eastern and central United States this year, but colder-than-normal temperatures are expected to dominate further west, according to forecasters at Andover, MA-based Weather Services International (WSI).

The federal government is considering the possibility of regulating the safety of gathering lines that serve the Marcellus Shale play in Pennsylvania, the head of the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) told a Senate panel Monday.

Colder weekend temperatures whose forecast appeared to lift prices earlier in the week were actually beginning to arrive Friday, but prices continued to drop across the board by fairly large amounts. A prior-day futures drop of 11.9 cents and record-high storage levels appeared to be the major depressants on the cash market. Of course, the usual weekend decline of industrial demand was another minor bearish factor.

Officials at the Golden Pass LNG terminal in Sabine Pass, TX, expect the terminal’s first commissioning cargo to arrive during October.

February natural gas futures released 29.5 cents of weather premium on Monday as reports forecast a warm-up to arrive late this weekend into next week. After recording a new high for the bull move of $6.108 just four days ago, the prompt-month contract closed Monday’s regular session at $5.454.

In an e-mail announcement that didn’t arrive until early that morning, Southern California Gas (SoCalGas) declared a high-linepack OFO for Saturday, setting the tolerance for positive daily imbalances at 10%. The OFO was lifted Sunday. SoCalGas also said it lost 50 MMcf/d of injection capacity at its Honor Rancho storage facility when repairs began Sunday on a packing leak of compressor Unit #4; the work is expected to continue through Friday.

With most of a widespread heat wave not due to arrive until after the weekend and continued prior-day negative guidance from July futures, cash prices fell again Friday at nearly all points. The typical weekend loss of industrial load and California OFOs contributed to the overall bearishness.

On the heels of El Nino, its opposite La Nina may soon arrive, which could increase hurricane activity in the Atlantic Ocean, according to the National Oceanic and Atmospheric Administration (NOAA). After getting a free pass last year with less activity than expected, Gulf of Mexico oil and natural gas producers in 2007 could be looking at a storm season more on par with the devastating one seen in 2005. In addition, electricity consumers could feel the price pinch if the western drought associated with La Nina episodes reduces hydropower capacity.

On the heels of El Nino, its opposite La Nina may soon arrive, which could increase hurricane activity in the Atlantic Ocean, according to the National Oceanic and Atmospheric Administration (NOAA). After getting a free pass last year with less activity than expected, Gulf of Mexico oil and natural gas producers in 2007 could be looking at a storm season more on par with the devastating one seen in 2005. In addition, electricity consumers could feel the price pinch if the western drought associated with La Nina episodes reduces hydropower capacity.