Forecasts

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.

Support from hot weather remained generally meager for the end of August, but the cash market relied on a prior-day rise of 7.9 cents by October futures and forecasts of a potential hurricane entering the Gulf of Mexico production area to rally by often-substantial amounts at all points Wednesday.

With Florida forecasts of temperatures in the mid 90s, Florida Gas Transmission issued an Overage Alert Day for market-area customers Tuesday with a 25% tolerance for negative daily imbalances.

Citing Florida forecasts of temperatures in the high 90s, Florida Gas Transmission issued an Overage Alert Day for market-area customers Friday carrying a 25% tolerance for negative daily imbalances.

Late-week price losses got steeper Friday even with forecasts of peak temperatures around 100 degrees or more still prevailing for most of the southern third of the U.S. Cooling trends in the key Midwest and Northeast market areas, along with the previous day’s plunge of 14.9 cents by September futures and the usual weekend drop of industrial load, obviously played a large role in Friday’s market softness.

Southern said based on weather forecasts and projected system demand, five delivery groups will become subject to an OFO Type Level 1 Tuesday until further notice. Penalties of $10/Dth will apply to shippers whose allocated deliveries in those groups exceed 105% of their daily entitlement, Southern said. See the bulletin board for details.