Factors

Growth in natural gas demand may not be a given consequence of efforts to cut greenhouse gas (GHG) emissions due to a trio of factors, a recent study has found.

Growth in natural gas demand may not be a given consequence of efforts to cut greenhouse gas (GHG) emissions due to a trio of factors, a recent study has found.

Growth in natural gas demand may not be a given consequence of efforts to cut greenhouse gas (GHG) emissions due to a trio of factors, a recent study has found.

While cold weather of late has helped to turn one analyst a little more bullish on U.S. gas prices for this year, bearish factors — including still-robust supply following a plummeting rig count — have other analysts tweaking their 2010 price forecast downward.

While cold weather of late has helped to turn one analyst a little more bullish on U.S. gas prices for this year, bearish factors — including still-robust supply following a plummeting rig count — have other analysts tweaking their 2010 price forecast downward.

Natural gas and oil prices are no longer connected, and strong gas supplies, the anticipation of warmer winters and a weak economy provide little evidence that prices will reconnect in the near future, according to Ernst & Young (E&Y). However, regulatory pressure to decrease carbon emissions could lift gas demand and prices, E&Y said Monday in its 4Q2009 outlook for the energy industry.

August natural gas futures soared Thursday on factors such as the supportive report of a major investment firm, a forecast of colder-than-normal winter weather and wounded traders seeking to profit from portfolio adjustments by the United States Natural Gas Fund (UNG). The release of inventory figures by the Energy Information Administration (EIA) was also considered mildly bullish. At the close August futures had jumped 38.5 cents to $3.668, and September added 38 cents to $3.813. August crude oil advanced 48 cents to $62.02/bbl.

CIG said various operating conditions related to gas loading factors in its Segment 118, located in the Oklahoma Panhandle, have caused variations in pressure that affect the pressure needed to deliver gas to the east end delivery points of Segment 118. “To assist in controlling these varying pressure levels, CIG will establish a new constraint point: Beaver East (BEC) between Beaver…and Floris (FRS),” the pipeline said. The operationally available capacity at this point will be 210 MMcf/d beginning Thursday. The new BEC constraint point will limit deliveries to FRS, Forgan, Mocane and Mid-America, CIG said, but it will not affect firm primary nominations.

CIG lifted Tuesday an Operational Warning it had issued in early October due to high load factors and limited storage injection capacity. CIG also noted in early November that the Operational Warning was still in effect (see Daily GPI, Nov. 4).