February natural gas managed to gain ground Friday as weather forecasts showed impending cooler conditions in eastern and north-central states. At the close February had risen 8.2 cents to $3.062 and March had added 8.1 cents to $3.098. February crude oil eased 25 cents to $101.56/bbl.
Articles from Forecasts
Continuing cold weather near the East Coast and in Eastern Canada contrasted with milder forecasts for the western two-thirds of the nation to produce mixed price movement Tuesday. A modest majority of locations softened. The restoration of industrial demand following a holiday weekend appeared to have little market impact.
Generally moderating forecasts for Friday that had The Weather Channel’s website asking “Late December…or Fall?” in its daily headline Thursday were a factor in Northeast quotes joining the softening trend that had begun on the previous day in the rest of the market. A small prior-day futures loss contributed a bit to downturns by all but a couple of trading locations.
Other than parts of the South, desert Southwest and California, it was rare to find any forecasts for Thursday lows that didn’t range from around freezing to a few degrees below zero. But that was able to keep only a little more than half of the cash market from seeing losses Wednesday. One source suggested that increasing use of storage in lieu of spot gas purchases may have been limiting the price-boosting impact of the cold weather.
In trading that apparently was based more on colder weather later this week than more moderate forecasts for Tuesday in several regions, prices were up at nearly all points Monday. The previous Friday’s screen loss of 6.4 cents proved to be little deterrent to rising prices, while they got a little extra support from the post-weekend return of significant industrial load.
Although influences such as weather forecasts and record-setting storage inventories were on the weak side, only a couple of points (OGT in the Midcontinent and NOVA Inventory Transfer in Western Canada) were lower Tuesday.
December natural gas swan-dived Monday in moderate trading as traders note weather forecasts have turned less supportive than earlier, production continues to outstrip modest demand and buyers remain unmotivated. At the close December had fallen 12.6 cents to $3.458 and January had retreated 9.6 cents to $3.600. December crude oil dropped 85 cents to $98.14/bbl.
Citing forecasts of cold weather in market-area Zones 5 and 6 limiting its operational flexibility to manage imbalances, Tennessee said it implemented an Imbalance Warning in those zones at the start of Friday’s gas day. All affected delivery point operators were required to keep actual daily takes out of the system equal to or less than scheduled quantities regardless of their cumulative imbalance positions, while receipt point operators had to keep actual daily receipts into the system equal to or greater than scheduled quantities regardless of their cumulative imbalance positions.
Not all the facts are in on the risks of hydraulic fracturing (fracking) well stimulation, so curtailing the practice would be a rush to judgment, according to a new report from the National Regulatory Research Institute (NRRI).
A Jefferies & Co. analyst this week cut his 2012 earnings forecasts and price targets by 30-50% for some of the biggest domestic onshore drillers and well service companies because he expects to see slower growth for oil and gas rigs.