Bentek

February natural gas is expected to open 2 cents higher Thursday morning at $2.14 as traders anticipate a government report showing the largest storage withdrawal of the season. Overnight oil markets weakened.

A group of analysts on Tuesday threw a wet blanket on the chances of growth in natural gas-fired generation in the West, particularly California, blaming it on the sun and the wind.

Natural gas for delivery Friday continued its trek lower in Thursday’s trading as most traders looked at unsupportive weather and a lackluster power pricing regime and saw little need for additional volumes.

Natural gas for delivery Friday continued its trek lower in Thursday's trading as most traders looked at unsupportive weather and a lackluster power pricing regime and saw little need for additional volumes.

November natural gas is set to open 4 cents lower Thursday morning at $3.62 as traders anticipate a government report showing another round of above-average storage builds and the market puts in a new low overnight. Petroleum markets rose in overnight trading.

FERC Friday gave Empire Pipeline Inc. the green light to place into service a major interconnection on its Tioga County Extension Project to transport Marcellus Shale production in Pennsylvania to the U.S.-Canadian border.

The New York State Department of Environmental Conservation (NYSDEC) has called on FERC to withhold approval for Empire Pipeline Inc. to begin service on its Tioga County Extension until it has complied with state soil disturbance and stabilization requirements.

Hurricane Irene turned out the lights on millions of East Coast residents and in doing so cut demand for natural gas by about 2.8 Bcf, according to an analysis by Bentek Energy LLC. The firm on Aug. 29 said the storm dropped gas demand by 1.3 Bcf in the Northeast since the previous Saturday (Aug. 27) and another 0.8 Bcf of demand loss was expected. About 0.7 Bcf of demand had been lost in the Southeast. Analysts at Canaccord Genuity Inc. also noted the storm’s gas demand destruction. “…[G]as-fired generation has declined by 2-plus Bcf/d over the past couple days, with the heaviest declines, not surprisingly, occurring in the Southeast and Mid-Atlantic regions,” the firm said. “At the same time, precautionary refinery shutdowns in conjunction with activity-limiting flooding suggest industrial demand is likely to see some degradation in these regions as well. Putting it all together, Irene was clearly a net bearish event for the gas complex and, depending on the length of outages, will likely lead to a cumulative natural gas demand loss of 30-plus Bcf over the next couple [of] weeks.”

Growing natural gas liquids (NGL) production from the Marcellus Shale could support one new pipeline project in the near term and possibly a second in about five years, according to Wells Fargo Securities senior analyst Michael Blum.