natural gas

An analyst with Barclays said the Department of Interior’s (DOI) rule for hydraulic fracturing (fracking) on public and tribal lands would have a limited effect on oil and natural gas output, but states that currently have no laws governing fracking could use the federal rule as a template.

It was yet another quiet week for natural gas forwards basis markets as seasonal temperatures ranging from the 60s to 80s are forecast for most of the U.S. over the next couple of weeks.

Those searching for signs that spring has sprung needed to look no further than the physical natural gas market on Monday as the prices for gas delivered Tuesday tumbled in nearly every region of the country, led by the Northeast.

The Energy Information Administration (EIA) in its Annual Energy Outlook (AEO) reports has tended to underestimate natural gas production and consequently overestimate net gas imports, according to the agency’sAnnual Energy Outlook Retrospective Review. In addition, natural gas has been the fuel with the largest absolute percentage difference between AEO projections and historical consumption. “This can be partially traced to the performance of natural gas price projections,” EIA said. “In earlier projections, the natural gas price was influenced by the changes in the world oil price, but this relationship has decoupled since 2000. Through AEO2005 [see Daily GPI,Dec. 10, 2004], the reference case has generally overestimated natural gas consumption, in part due to the tendency for significant underestimates of the natural gas price. In addition, industrial natural gas usage is highly sensitive to business cycles, leading to greater volatility in overall natural gas consumption.” EIA’s AEO2014 concluded that abundant supply and low prices would drive consumption of gas in the industrial and electric power sectors to new levels in 2040 (see Daily GPI,May 8, 2014;Dec. 16, 2013).

It was yet another quiet week for natural gas forwards basis markets as seasonal temperatures ranging from the 60s to 80s are forecast for most of the U.S. over the next couple of weeks.

Natural gas for weekend and Monday delivery gained ground in Friday trading, but the market was split between broad gains at most market points from the Midwest east and weakness in the Rockies, Pacific Northwest and California.

Another Appalachian pipeline project continues to face grassroots opposition from three families in southern West Virginia in an area removed from the shale gas boom in the northern part of the state. The group has filed lawsuits in Monroe and Summers counties courts against the Mountain Valley Pipeline to stop surveying efforts, claiming that the project has no benefit to the public and is therefore not eligible for eminent domain in the state. Mountain Valley is a joint venture of affiliates of EQT Corp. and NextEra Energy Inc. (see Shale Daily,Oct. 29, 2014;June 12, 2014). The 300-mile pipeline would deliver Marcellus and Utica Shale gas to markets in the mid-Atlantic and Southeast.

At first glance weekly natural gas price movements looked quiet and unassuming. That is until you factor in the typically volatile Northeast and at that point everything changes. The NGI Weekly Spot Gas Average rose 30 cents to $2.79, paced by stout weather driven gains in New England, and the Mid-Atlantic.

Texas Gas Transmission LLC is seeking authorization at FERC for its Western Kentucky Lateral Project in Muhlenberg County, KY, which would deliver natural gas to a planned generating unit at Tennessee Valley Authority’s (TVA) Paradise Fossil Plant.