Peak

With the peak season for Atlantic hurricanes upon us as the calendar flips to August, natural gas futures kept the momentum to the upside rolling on Friday as the September contract added 9.6 cents to $4.923. The contract closed the week 36 cents higher than the previous week.

Although peak temperatures in the key northern market areas of the Northeast and Midwest are retreating into the low to mid 80s for the most part, it’s still way hot way down South (and through much of the Midcontinent and Lower Midwest into the desert Southwest and to some extent in the southern Rockies). Bottom line: the residual heat and prior-day futures support kept cash prices rising moderately at most points Thursday.

Forecasts of peak temperatures remained on either side of 90 in the South, Northeast and Midwest, and they were even destined to reach the mid to upper 90s Tuesday in the Rockies. Cash traders shrugged their shoulders, however, and instead noted the previous Friday’s 6.3-cent drop by August futures and the weekend fade of any tropical storm threat to Gulf of Mexico output in sending prices slightly lower at most locations Monday.

Northern California utility electric and natural gas infrastructure absorbed a 6.5-magnitude earthquake off the coast of the fishing town of Eureka on Saturday. At its peak 36,000 Pacific Gas and Electric Co. customers were without electricity and/or gas services, but by 8 a.m. Sunday all of them were restored, a PG&E utility spokesperson told NGI.

With the U.S. natural gas rig count down dramatically, domestic gas supplies should fall by 2 Bcf/d or more, or by 4%, by year’s end, setting up a peak-to-trough decline of almost 5 Bcf/d, or 9%, by the middle of 2010, analysts with SunTrust Robinson Humphrey/the Gerdes Group (STRH) said last week. Barclays Capital analysts, however, said it would take colder-than-normal winter weather to bring storage to a neutral level.

The Georgia Public Service Commission (PSC) has approved an Atlanta Gas Light Co. (AGLC) request to begin a multi-year system upgrade to improve service on peak demand days.

With the U.S. natural gas rig count down dramatically, domestic gas supplies should fall by 2 Bcf/d or more, or by 4%, by year’s end, setting up a peak-to-trough decline of almost 5 Bcf/d, or 9%, by the middle of 2010, analysts with SunTrust Robinson Humphrey/the Gerdes Group (STRH) said Monday.

Forecasts of peak Florida temperatures in the 90s and high usage of its linepack prompted Florida Gas Transmission to issue an Overage Alert Day for market-area customers Tuesday. The tolerance for negative daily imbalances was set at 25%.

Natural gas prices through the end of September are expected to average $3.80/MMBtu, while prices in the fourth quarter will average $5, energy analysts with Bank of America-Merrill Lynch (BA-ML) said in a note to clients. However, if gas storage levels continue to climb, analysts said Henry Hub prices could dip below $3.