Increases

Credit Suisse Friday cut its U.S. natural gas price forecast for 2009 to $3.92/Mcf from $4.00, and sliced the 2010 estimate to $4.642 from $5.140. Weighing on the 2010 prices are expected increases in LNG imports and the start-up of 15 new coal-fired plants.

The cash market showed it had not yet run out of steam, despite a futures rally faltering slightly a day earlier, as it logged increases across the board Wednesday in its third straight day of overwhelming firmness. Outside the well established major heat areas of the south-central and southwestern U.S., cooling load was no stronger than normal at best in the South and about to start receding to some extent in the Northeast following an extended above-normal period.

The market was marginally firmer Wednesday as a significantly greater number of points were seeing small increases than a day before. The rationale for the modest rise in bullishness was elusive, as cooling demand was receding to some extent in the Midcontinent and parts of the South while mostly moderate conditions still dominated the rest of the weather picture. Also, Tuesday’s flat July futures provided no support for cash numbers Wednesday.

As a marketer had anticipated a day earlier, cash prices capped a week of solid advances Friday by recording increases throughout the market. A bit of extra chill was due in the Midwest and Rockies over the weekend, but otherwise forecasts remained about as benign for gas demand as they were earlier in the week. Industrial load’s weekend decline obviously had little impact.

Increases in domestic production, new pipeline infrastructure and the shifting sources of imports will create a “bonanza” for natural gas buyers in the Northeast, according to Evergreen, CO-based Bentek Energy, which just released the third part of its three-part “Catch the Wave” report (see NGI, Jan. 19; Nov. 17, 2008) documenting changes to the region that has traditionally been the highest-priced North American market.

The market was close to flat in most cases Thursday as only a few points saw more than single-digit change either up or down. Overall it was a bit weaker as softness tended to overshadow gains more than on Wednesday. Cooler forecasts for Friday in the Northeast and much of the South were counterbalanced by warming trends in the Midcontinent/Midwest and Rockies, with Wednesday’s 12.8-cent loss by April futures tipping the market scales more to the bearish side.

Increases in domestic production, new pipeline infrastructure and the shifting sources of imports will create a “bonanza” for natural gas buyers in the Northeast, according to Evergreen, CO-based Bentek Energy, which just released the third part of its three-part “Catch the Wave” report (see Daily GPI, Jan. 14; Nov. 14, 2008) documenting changes to the region that has traditionally been the highest-priced North American market.

Prices continued to rise in most of the cash market Wednesday, but a large majority of the increases were about a dime or less. There is still plenty of cold weather from the Northeast through the Midcontinent/Midwest and Plains to the Rockies, and the South is starting to make a much more significant contribution of heating load.

Increases in heating load, with more on the way, combined with the previous day’s 38.1-cent spike by December futures to keep cash prices on the rise at most points Wednesday. Expectations by some analysts of a rather small storage injection report Thursday may have added to the overall bullish mood.