Moderate

Forecasters at the National Oceanic and Atmospheric Administration said Thursday that a weak or moderate El Nino event (warmer than normal ocean temperatures in the equatorial Pacific) is likely to develop during the next six-to-nine months, but it should have much less impact than that of the strong 1997-98 El Nino. El Nino events typically hinder hurricane activity, according to NOAA.

Thursday’s market was a near-repeat of the one the day before: moderate softening in the East but closer to flat in the West. The main differences were smaller eastern losses (virtually all declines were around a dime or less Thursday) and the fact that a few western points, primarily PG&E-related, were able to eke out modest gains.

What several sources believe may be an extended period of slow, often featureless and softer cash trading was launched Tuesday with all points on the same falling price page. Trends were more consistent across the entire market, with a large majority of points registering declines from a little less than a dime to about 15 cents. More modest drops tended to occur in non-Permian Basin western markets, while larger losses were recorded in the Northeast.

Mostly moderate softness dominated the cash market Tuesday, as a falling screen and moderating weather were the primary influences. Price movement ranged from 1-6 cents down at several western points, while generally larger drops in the East went from about a nickel to down about a quarter on the Appalachian pipes. The PG&E citygate managed to eke out a small gain.

With fundamental influences remaining weak and a falling screen to boot, it was hardly surprising Monday when cash prices failed for the most part to rebound from their weekend softness. Movement ranged from essentially flat to down a dime or so at nearly all eastern, California and Permian Basin points. The weakness was more pronounced in the Rockies/Pacific Northwest and San Juan Basin markets, where declines ranged from about a dime to 20 cents.

A relatively bullish storage report (65 Bcf), rising futures prices, continued moderate heating demand and the shutdown of another unit at the Palo Verde nuclear station in Arizona all contributed to solid price increases across the board yesterday.

Prices ranged from essentially flat to down about 15 cents at Malin Monday. Apart from Malin, all other declines were generally a dime or less. Weather fundamentals remained weak in the northern market areas and Tropical Storm Chantal was getting little credence as a serious threat to Gulf of Mexico production for the time being. Those factors and screen weakness accounted for much of the post-weekend cash softening, sources said.

Given the higher production levels and moderate summer temperatures (at least until last week), spot natural gas prices are likely to hover around $3/Mcf for the rest of the third quarter and rise later in the year, said the Energy Information Administration (EIA) last week in its Short-Term Energy Outlook for August.

Given the higher production levels and moderate summer temperatures (at least until now), spot natural gas prices are likely to hover around $3/Mcf for the remainder of the third quarter and increase moderately later in the year, said the Energy Information Administration (EIA) in its Short-Term Energy Outlook for August.