Degree

Basing its strength largely on Monday’s 14-cent near-month futures gain, and to a lesser degree on the South adding some air conditioning load to that already existing in the scorching desert Southwest, the cash market recorded double-digit increases across the board Tuesday. Opinions were divided on whether the rally could be sustained Wednesday.

Citing lower linepack and forecasts of 90-degree weather in its Florida market area, Florida Gas Transmission kept an Overage Alert Day that was implemented Monday in place through at least Tuesday, but tightened the tolerance for negative daily imbalances from 20% to 15%.

An industry-touted method for revaporizing liquefied natural gas (LNG) aboard offshore terminal facilities “substantially increases the degree of impact on the marine environment,” particularly fish larvae and eggs, said federal marine officials in a draft “best practices” report, which was offered as guidance to the National Oceanic and Atmospheric Administration (NOAA) in analyzing LNG terminal applications.

Prices fell by large amounts across the board Thursday. An impending change to colder weather would not yet be under way to any significant degree Friday, and cash quotes felt the negative pressure of the previous day’s futures plunge of nearly 60 cents. The screen traded Thursday morning nearly $1.50 below the $9.82 peak it had reached during Wednesday morning’s cash market activity.

The combined impact of 17% below-normal heating degree days (HDD) in the six-week period ending Nov. 18 and various demand destruction effects more than offset the 4.6 Bcf/d of shut-ins caused by Hurricanes Katrina and Rita, and U.S. natural gas storage is expected to be above historical levels by April, according to separate analyses by two energy consultants.

Property sales and to a lesser degree, the recent hurricanes, sent Oklahoma City-based Devon Energy Inc.’s combined oil and natural gas production down from a year ago, but even with the divested assets, high commodity prices lifted net earnings 44%, to $744 million ($1.63/share), compared with $517 million ($1.03) in 3Q2004.

Citing Hurricane Katrina-caused reductions in receipts into Zone 3 of its system and 90-degree forecasts for the Florida market area, Florida Gas Transmission initiated a new Overage Alert Day notice Sunday and kept it in effect through at least Monday. The tolerance for negative daily imbalances was set at 25% both days.

Due to Hurricane Katrina causing many reductions in receipt volumes into its system and 90-degree temperatures being forecasted in Florida, Florida Gas Transmission issued an Overage Alert Day notice for its market area Sunday at 25% tolerance for negative daily imbalances. It tightened the tolerance to 10% Monday as supply problems continued.

After starting Monday with what appeared to be $9 intentions, September natural gas futures did a 180-degree turn just after noon EDT, plunging 37 cents from its $8.87 high to record an $8.50 trade. However, that level set off the buy alarm as the prompt month climbed back up to settle at $8.684, down 1.6 cents for the day.