Colder

Due to colder than normal temperatures in market-area Zone E/F, Northern Natural Gas called a System Overrun Limitation day for the zone Tuesday.

Due to colder than normal temperatures and system conditions, Northern Natural Gas issued a System Overrun Limitation Sunday. It remains in effect through at least Wednesday’s gas day.

Colder-than-usual weather improved annual income at Charlotte, NC-based Piedmont Natural Gas Co., which reported earnings of $74.4 million ($2.22/share) for fiscal 2003, compared with $62.2 million ($1.89) in 2002. Results included a $5.5 million (17 cents/share) increase because of its changes in accounting, which now record natural gas revenues and costs on volumes delivered but not yet billed.

This week’s mighty price rally, spurred by blasts of colder weather than anticipated in many areas, appeared to have stalled Wednesday as most points were flat to a little more than a dime lower and Northeast citygates plunged almost as fast as they had run up earlier (several fell by about a dollar or so, and the Algonquin citygate was down more than a dollar and a half).

Bullied by a surprisingly strong blast of winter weather, the natural gas futures market turned abruptly higher Monday as waves of fund and local short covering entered the trading pit. A stronger open set the tone and by 12:30 p.m. EST the January contract had carved out a new six-week continuation-chart high at $5.38.

After rallying Wednesday because some areas would be turning colder by the weekend, prices seemed to be having second thoughts about the situation Thursday. The result was a cash market resembling the ones that ended last week and began this week: a mixture of moderately higher and lower numbers that was dominated by declines.

Only a much colder than normal winter would stop gas prices from falling below $4 in the next few months, according to consultant Stephen Smith, who sees a significant supply surplus built into the market because of lasting demand destruction and new supply from non-traditional resources.

Only a much colder than normal winter would stop gas prices from falling below $4 in the next few months, according to consultant Stephen Smith, who sees a significant supply surplus built into the market because of lasting demand destruction and new supply from non-traditional resources.

It’s getting hot again in the Southwest and even chillier in the Midwest and Upper Plains. Those fundamental weather boosts, along with increased interest in storage buying while prices are still relatively low, were enough to generate a rally throughout most of the cash market Monday, despite lingering power outages and/or mild weather dampening demand in the Mid-Atlantic and Northeast.