Soaring citygate numbers in the Northeast, where a major Nor’easter was forecast to develop during the weekend, ran against the grain of falling prices everywhere else Friday. Weather moderation was expected to begin in some areas early this week, and a prior-day 21.5-cent decline by January futures along with the decline of industrial load that occurs during a weekend contributed further negative guidance for Friday’s cash market.
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Rockies Spikes Lead Strong All-Point Price Gains
Despite some protestations about “storm hype,” it could not be denied that cash numbers saw big increases across the board Tuesday based on screen support from the day before and the possibility that an upper-atmosphere low-pressure system in the southeastern Gulf of Mexico (GOM) could begin to threaten offshore production before the weekend.
BP, Chevron to Miss Production Targets for ’06
BP plc and Chevron Corp. both warned last week they expect to report lower-than-expected production numbers for the final quarter of 2006. Lower commodity prices also are expected to dampen year-end earnings reports.
LADWP OKs $2.7B Power ’06-’07 Budget; $444M for Natural Gas
Having authorized the raw numbers and programs for its fiscal 2006-07 multi-billion-dollar budget, the Los Angeles Department of Water and Power (LADWP) oversight board Tuesday directed the city-run utility’s management to pursue 10-year contracts in its natural gas hedging strategy and calculate proposed electric fuel cost and renewable energy rate adjustments by the board’s July 18 meeting.
Cold’s Continuance Fails to Support Most Prices
The cash market clung to flat to slightly higher numbers at a few points Tuesday, but the predominant direction of price movement was downward. Although the weather picture continued to look fairly wintry through Wednesday and beyond for the Northeast, Midwest, Plains and to a lesser degree the upper West, storage use appeared to be offsetting demand for new production to a large degree.
Deepwater Spending Forecast to Surge in Next Five Years
Despite declining well numbers in many offshore regions around the world, drilling services will continue to attract a “flood” of cash, with deepwater expenditures — especially in West Africa and the Gulf of Mexico — nearly doubling in the next five years, according to Douglas-Westwood Ltd.’s latest worldwide offshore drilling forecast.
Market Still Firmer Overall, But Remains Mixed
Cash numbers were firmer again Wednesday in most cases, but several points that were flat to nearly 35 cents lower continued to keep the market from uniting in consistent price movement. Some prior-day screen support and the persistence of Gulf Coast supply shortfalls were considered the key reasons behind gains ranging from about a nickel to a dollar.
Spikes at Virtually All Points End Sept. Trading
Following two days of mixed numbers, the cash market closed out September business Thursday with virtually all points on the same price page and skyrocketing (except for a flat Florida citygate). Dollar-plus spikes were frequent as quotes were jolted higher by the screen’s $1.251 move higher on Wednesday as October natural gas futures went off the board. Weather fundamentals are generally weak right now as comfortable early-autumn weather gets more firmly established in most areas.
Strong Gains Continue at Majority of Points
Flat to lower prices at a few scattered points remained the exceptions in an otherwise bullish market Thursday. This time cash numbers could claim support from a prior-day screen gain of 40.3 cents, along with continuing concern about Hurricane Katrina shut-ins and winter supplies, in offsetting weaker weather-driven demand.
Cooling Load Cited as Most Prices Advance
Showing that significant screen weakness on the previous day is not an automatic harbinger of subsequent softness in cash numbers, prices ranged from flat to as much as 65 cents higher at nearly all points Tuesday despite a natural gas futures loss of nearly a quarter on Monday. A few Gulf Coast points softened by as much as a dime in exceptions to the overall market strength.