Holiday

Although there were a few more flat to moderately higher quotes than on Friday, a holiday-shortened trading week opened Monday much as the previous one had ended Friday: with losses at a large majority of locations. However, in a slightly bullish sign several of the gains had gotten significantly larger, and most of the losses had shrunk to single digits instead of the double-digit drops that were so prevalent Friday.

The natural gas futures market on Wednesday continued to limp back from the long holiday weekend as another round of light trading in the October contract produced a 14-cent range on the day before closing the regular session at $3.940, up two-tenths of a penny from Tuesday’s finish. The November contract followed suit with a 0.2-cent gain to close at $4.045.

August natural gas fell in light, pre-holiday trading as traders still maintained an upward bias but noted that healthy production levels still remain a formidable force for the bulls to counter. At the close August had fallen 6.3 cents to $4.311 and September had slipped 6.3 cents as well to $4.330. August crude oil softened 48 cents to $94.94/bbl.

In apologizing to customers for unexpected reductions in capacity on the Baja Path over the holiday weekend (see the bulletin board for details), Pacific Gas and Electric’s California Gas Transmission (CGT) system said in addition to planned maintenance, it discovered an excessive amount of odorant in a section of Line 300B late May 25. Operations personnel have been working to isolate and purge the overodorized gas and expected to have this situation resolved Wednesday (June 1), CGT said.

Citing limited operational flexibility to manage imbalances over the long holiday weekend, Tennessee issued a systemwide Balancing Alert for Saturday that required all delivery point operators to keep actual daily takes from the system equal to or greater than scheduled quantities, and all receipt point operators to keep actual daily receipts into the system equal to or less than scheduled quantities. The requirement applied in each case regardless of the operator’s cumulative imbalance position.

May natural gas futures posted a stout double-digit gain Thursday ahead of an extended holiday weekend as traders reacted to a government inventory report showing storage gas to be somewhat less than anticipated. At the close May had advanced 10.2 cents to $4.412 and June gained 10.9 cents to $4.466. June crude oil continued its winning ways, posting a gain of 84 cents to $112.29/bbl.

Sempra Energy confirmed that over the New Year’s holiday it completed its first re-export of a liquefied natural gas cargo from its Energia Costa Azul terminal on the Pacific Coast of North Baja California, Mexico. “For commercial reasons, we never discuss the details of our LNG cargoes,” a Sempra spokesperson said. “We sought export approval [from Mexican authorities] for this particular cargo and do not have general authorization to export cargoes on a regular basis.”

The cash market closed out the holiday-shortened trading week Friday much the same way as in the previous three days — with a majority of points again registering flat to moderately higher numbers.

The strong rise of 18.8 cents by October futures going into the holiday weekend was about the only rationale for higher prices in most of the cash market Tuesday as weather fundamentals were decidedly mild for early September in most areas.