While market bears are currently in the driver’s seat and appear likely to push near-month futures prices down into the mid-$5s or possibly lower barring a sudden increase in hurricane activity, the bulls clearly have control of the out-months with the spread between October and January futures recently peaking at a whopping $4.70. Some analysts conclude that these spreads are a clear indication that lower prices won’t be around for long.
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Bearish Fundamentals of Mild Weather, Rising Production, Conservation Hit Market
With bearish fundamentals finally in the driver’s seat of the gas market once again, futures prices have plummeted to about $9.50 from a peak of $15.78 on Dec. 13, 2005, and analysts are dropping their forecasts for 2006. Arlington, VA-based Energy and Environmental Analysis Inc. (EEA) now predicts Henry Hub prices will be back to $6.45 by April and eventually will hit $5.50 by October when all the shut-in Gulf gas production has returned.
Cold Weather Is the Driver of Cash Rally
Prices rallied at all points Wednesday from the prior day’s overall softness as widespread heating load reasserted itself as the driver of an upward-looking market. Forecasts of virtually no let-up in frigid temperatures, along with Wednesday’s screen advance of 21.1 cents, portend further cash gains Thursday.
Natural Gas Still Driver in CA Utilities’ Potential Power Supplies
Even as California’s new governor-elect and various stakeholders emphasize more electricity from renewable sources, the initial proposed power procurement plans by two of the state’s major electric utilities last week emphasized new natural gas-fired power plants. And one those plants is the controversial one that Southern California Edison Co. is attempting to develop with an unregulated affiliate owned by its parent, Edison International.
Heat, Not ‘Hype,’ Is Primary Driver of Cash Advances
Hot weather throughout most of the U.S. (with the exception of mild conditions in the Upper Midwest) spurred price increases ranging from about a nickel to 15 cents at nearly all points Monday. Continuation of firming numbers was in doubt, however, due to cold fronts in the Midwest and approaching the Northeast, with the one in the Midwest due to push on into the South over the next day or two.
Hype? Whatever, Claudette Spurs Further Price Gains
Hype or not, Tropical Storm Claudette was the primary driver behind further moderate advances in the cash market Wednesday. Cold fronts were causing much of the Midwest and Northeast to lose some of the air conditioning load that had kept the regions sweltering earlier in the week, but major heat continued to dominate the weather picture in the West (outside the Pacific Northwest and California coast) and South. The screen wavered on either side of flat before eking out a meager gain of 1.7 cents on the day, and thus had little new influence on cash prices, one trader said.
Choppy Trading, Supportive Storage Data Leave Nymex Bulls in Driver’s Seat
Natural gas futures were caught in choppy trading action Thursday morning as bullish storage data met head on with the market’s seasonal propensity to move lower in the first quarter of the year. After an initial dip failed to attract much follow-through selling, buyers managed to support the market throughout the rest of the session. March finished at $6.162, up 2.8 cents for the day.
U.S. House Port Security Bill Approval Puts LNG, CNG in Driver’s Seat
Taking action on a measure that will improve the safe and secure transportation and delivery of compressed and liquefied natural gas to U.S. shores, the U.S. House of Representatives late Thursday night passed S. 1214, the ‘Maritime Transportation Security Act of 2002’ by a voice vote. The bipartisan legislation establishes a comprehensive national system to increase anti-terrorism security at hundreds of U.S. ports and waterways.
U.S. House Port Security Bill Approval Puts LNG, CNG in Driver’s Seat
Taking action on a measure that will improve the safe and secure transportation and delivery of compressed and liquefied natural gas to U.S. shores, the U.S. House of Representatives late Thursday night passed S. 1214, the ‘Maritime Transportation Security Act of 2002’ by a voice vote. The bipartisan legislation establishes a comprehensive national system to increase anti-terrorism security at hundreds of U.S. ports and waterways.
Utility Puts Customers in Driver’s Seat
Responding to one of the early lessons from electricityderegulation efforts in California and other states, Bellevue,WA-based Puget Sound Energy announced last week (Sept. 27) it istaking steps to eventually give all of its customers the tools toshift their energy use away from the highest-priced, peak-demandperiods. Elected and regulatory officials in other states likeCalifornia have already said that this so-called”demand-responsiveness” for customers is the one essentialingredient that is missing in their drives to create competitiveretail electric markets.