The natural gas futures market tumbled lower last Friday morningwhen a lower open was greeted with steady, unchecked sellingpressure. But after getting caught snoozing early in the day, bullsfought back by bidding up the March contract above $1.80 in choppymidday activity. And by 2:30 in the afternoon many sources feltthat the market would close out the week quietly-right? Wrong-lateposition squaring and market-on-close sell orders had the last sayFriday as they deposited the prompt month contract to its $1.777settle. Estimated volume was 67,482.
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Articles from Note
Futures Drop in Christmas Eve ‘Surprise’
The futures market gave the impression it would finish the weekon a boring note, and for nearly the entire abbreviated tradingsession last Thursday it did just that-trading within a tighttwo-cent range. But that was before bears gave the market a littlepre-Christmas surprise by selling the market into the final bell.The prompt January contract finished 2.5 cents lower at $1.881.Estimated volume was a paltry 24,112 contracts.
Transportation Note
A systemwide entitlement against overtakes that began Dec. 19 onNorthwest remained in effect going into the holiday weekend.Northwest said Wednesday it would continue to operate under a Stage1 entitlement at 3% because it had not seen sufficient improvementin system conditions. However, as of Wednesday the entitlement waslifted on points south of Kemmerer (WY) Station.
Cash Prices Ride the Bull, Continue Upward
Cash prices started the new week on an upward note, largelymotivated by an early Nymex run-up and forecasts of colder weatherfor some major market areas. Except for Northeastern markets, spotprices at most trading points registered gains ranging anywherefrom 1 to 6 cents in the Gulf Coast area to more than 20 cents inCalifornia markets.
Quiet Trading Leaves Sources to Ponder Futures Direction
The futures market concluded the week on a quiet note Friday asneither bulls nor bears were able to influence a move in theirfavor. After a lower open the November contract quickly filtereddown, filling in the chart gap to $2.35. But the $2.35 level held,and the market was left to trend higher into the closing bell. TheNovember contract settled at $2.432, a 1.8-cent gain on the day.
Transportation Note
Citing continuing reduction of capacity by unseasonably hightemperatures, PG&E Gas Transmission-Northwest said it wouldagain be necessary to limit volumes today to 2,450 MMcf/d atKingsgate and to 1,870 MMcf/d at Station 14 (the last one upstreamof Malin) in order to return the system to optimum performance.
Transportation Note
Pacific Gas & Electric extended a low-inventory Stage 1 OFO(see Daily GPI, Sept. 1) through today. Penalties were unchanged,but the negative imbalance tolerance was tightened to 5%.
Transportation Note
Williams will abandon service Sept. 1 on its Pampa Line(designated as Line Segment 470), which runs from Hemphill County,TX to the Alva Compressor Station in Woods County, OK. As of Sept.1 Williams will not confirm nominations at any of 10 Pampa Linereceipt points. Point operators must either find other outlets fortheir gas or shut it in, Williams said. Shippers currentlytransporting from those points must replace the gas with othersupplies. The Hobart Ranch and South Bishop receipt points and theArnett and Irrigation delivery points, once connected to Pampa,have been moved to the Canadian-Blackwell Line (LS 458) and canstill be nominated on Williams.
Transportation Note
Fearing a weekend threat to system integrity from oversupply,Sonat implemented an OFO Type 6 effective Saturday (July 25) untilfurther notice. The OFO carries tiered penalties of up to $15/dthfor positive imbalances exceeding 8% of allocated deliveries.
Transportation Note
Mojave Pipeline will shut in its Mt. Poso delivery point foreight hours July 28 to modify piping. El Paso’s Monument B Plantwill be down eight hours on July 29 for piping repairs. TheIWARMONU interconnect will be completely shut in while ITEXNEUNwill be limited to 35 MMcf/d.