Colder

Citing the market’s jitters over strapped gas inventory levelsas it faces the prospect of a much colder winter this year, theEnergy Information Administration (EIA) last week projected thatwellhead prices will stay above the $5/Mcf mark throughout thiswinter, fueling price hikes of about 40% for residential gascustomers.

Citing market’s jitters over strapped gas inventory levels andthe prospect of a much colder winter this year, the EnergyInformation Administration (EIA) projects that wellhead prices willstay above the $5/Mcf mark throughout this winter, fueling pricehikes of about 40% for residential gas customers.

Thanks to impending colder weather in the major northern marketareas along with some extra boost from a rising screen, overallcash prices ranged from flat to about a nickel higher Thursday,with increases of 3-6 cents tending to occur most frequently.

Due to freezing weather, Northern Natural Gas declared a SystemOverrun Limitation for all market-area zones Thursday.

Due to forecasts of colder weather, a System Protection Warningtakes effect today until further notice for MRT’s mainline north ofthe Glendale (AR) Station. MRT recommended that customers withinterruptible and Authorized Overrun gas on the mainline re-sourcethose volumes to the East Line. The East Line is a lateral about 90miles long from Trunkline in central Illinois east to the St. Louisarea, connecting with NGPL along the way. If excess volumescontinue on the mainline, MRT said, it will issue an OFOrestricting that line to FT only.

Natural Gas futures rallied again yesterday as traders reactedto colder-than-expected temperatures throughout much of the Midwestand Southeast. And similar to advances made last week, Monday’sprice action was fast and furious with the February contractleading the way and gapping 6 cents above Thursday’s high. However,once the $2.085 high for the day was reached about 10:30 EST, theprompt month was left to move sideways within a narrow trading bandfor the rest of the session, notching a 12.6-cent increase tofinish at $2.071.

The Energy Information Administration is projecting gas demandin the fourth quarter to be 5%-6% lower than it was in 4Q 1997,which was a colder-than-normal quarter. It sees 8.9% fewer heatingdegree-days this quarter than during the prior year’s period. Allsectors are showing lower gas demand in this quarter, except forelectric utility gas demand, which may hold to levels seen in 4Q1997. Overall natural gas demand growth this year is now projectedto be 2.9% below the 1997 level.

The Energy Information Administration is projecting gas demandin fourth quarter to be 5-6% lower than it was in 4Q97, which was acolder-than-normal quarter. It sees 8.9% fewer heating degree-daysthis quarter than during the prior year’s period. All sectors areshowing lower gas demand in this quarter, except for electricutility gas demand, which may hold to levels seen in 4Q97. Overallnatural gas demand growth this year is now projected to be 2.9%below the 1997 level.

Cash prices came out of the chute fast Monday morning as coldertemperatures, strong NYMEX prices and a bit of hype tricked mostmarkets into early gains. “A buyer blinked early this morning andsellers took control,” a Tulsa marketer said. The early strengthpushed prices to 5-8 cents above index levels in some cases.However, after the market caught its breath, sellers came out ofthe woodwork to send prices lower and late trades were back nearindex levels. Western prices followed the East’s early lead butresisted the major downturn.