Heating

Generally, conditions are not as cold as they will get later in the week, but prices found enough demand for heating purposes to record gains at a sizeable majority of points Monday. The restoration of industrial load following its usual weekend dip was an additional, albeit minor, price booster. Mixed price moves were dominated by flat to about 30 cents higher numbers, with all of the double-digit gains confined to the Rockies and Northeast.

Quebec natural gas consumers have been granted a reprieve from losing heating season supplies as a result of a potential hazard on their lone pipeline.

A large majority of points softened Monday as significant heating load was generally scarce and winter term deals along with sparse use of storage were able to meet many buyers’ needs.

Relatively cool weather in most of North America has yet to translate into substantive heating load increases; a tropical storm threat remains nonexistent and likely to stay that way through the final two months of the 2011 Atlantic season; and a screen drop of 8.1 cents Friday kept downward pressure on the cash market. The return of industrial load from its weekend decline provided weak market support.

Even with heating load staying generally on the light side and weaker prior-day futures, cash prices managed to achieve modest increases at nearly all points Tuesday. It was among other market vagaries in which price moves seemed to be at odds with demand realities.

The cash market bowed to a general lack of significant heating or cooling load and only minor flooding disruptions of production in South Louisiana in retreating to mostly near-flat numbers and several small losses Tuesday, although moderate upticks were recorded at a majority of points.

With activity heating up in several Permian Basin shale plays, Houston-based start-up Nuevo Midstream, LLC announced Wednesday it has secured a $65 million equity commitment to develop midstream infrastructure for natural gas producers in the Permian.

Prices continued to move higher at a majority of points as this week’s overall rebound completed its third day Wednesday. Heating load remains fairly strong as lows from the mid 20s through the low 40s are in the Thursday forecast for Canada and much of the northern two-thirds of the U.S.

Southern lows predicted to drop to the 50 area east of the Mississippi River were contributing a small amount of heating load to the much bigger demand in Canada and from the U.S. Northeast through the Midwest into the Upper Plains. The entire cash market continued to move higher Thursday except for a flat Agua Dulce, but significantly smaller increases than the day before signaled that the week’s bullishness might be running out of steam.