Lull

Global LNG prices will be in a summertime lull until wintertime following a price run-up caused by a pre-summer supply buying spree, according to analysts at Bank of America Merrill Lynch. Still, LNG markets will remain tight in the coming years as import capacity additions continue while liquefaction growth takes a breather.

Global LNG prices will be in a summertime lull until wintertime following a price run-up caused by a pre-summer supply buying spree, according to analysts at Bank of America Merrill Lynch. Still, LNG markets will remain tight in the coming years as import capacity additions continue while liquefaction growth takes a breather.

After a lull following the post-Enron credit crisis, corporate merger and acquisition (M&A) activity once again is on the rise, driven by interest in regional market scale and rising cost pressures among several other factors, according to a new report by Merrill Lynch analysts Steve Fleishman, Jonathan Arnold and Elizabeth Parrella.

Anxious to clear its agenda and get ready for a Holiday lull, the California Public Utilities Commission Thursday cranked out more than a half-dozen energy actions, including the acceleration of a critical power transmission line project, the continuation of a $125 million distributed generation incentive program, and the setting of 11%-plus returns-on-equity (ROEs) for the state’s two major utilities.

Following Wednesday’s brief market lull in which gains were small and softening had set in in some cases, all points were back on the same rising page again Thursday. A multi-day bullish streak in natural gas futures got the chief credit for the new advances, as gradually rising power generation load in the South was approximately offset by falling load caused by cooler temperatures in the Midwest, Plains and eastern Rockies.

Wednesday’s general market softness was merely a lull in this week’s upward march of prices. Nearly all points were back on the rise Thursday, with the exception of a few small downturns in the Rockies and at scattered other points. Most gains were in the teens, bracketed by some in single digits and others of 20 cents or more in the Northeast, led by Algonquin citygate spikes of about 60 cents that included a peak quote of $9.25.

Prices slumped Friday as the usual weekend lull in gas demandkicked in, and little severe heat was expected outside the southerntier of states. Western markets tended to see more of the largerdecreases, while a few eastern points managed to hang in there atflat leveles.

Despite a leveling off of the general cash market Thursday, inno way did it signify that the recent price slide was coming to anend, sources said. Instead, there was a consensus that weekendnumbers will be performing an ugly swan dive today. Chiefly therewill be the influence of Thursday’s dime-plus screen drop, whichoccurred for the most part after cash business had been completed,several traders said. In addition, quite a few pipelines eitherhave high-linepack OFOs already in place or are expected to issuethem today as storage injection capabilities are highly constrainedon nearly every system. And although it was getting decidedlychillier Thursday in the Midwest and Northeast market areas, theweather still wasn’t cold enough to generate any great amount ofheating load.

With moderating temperatures, a hurricane lull and an upcomingholiday weekend pulling the rug out from under bidweek cash prices,the Nymex October futures contract also decided to take the plungeyesterday, plummeting into the $2.70s before settling in thelow-$2.80s and adding to last week’s market dip. Some observersbelieve October is destined to test at least the $2.60s before thisdrop is over.