Reduced

Citing unseasonably warm weather and reduced natural gas demand, the Energy Information Administration (EIA) in its Short-Term Energy Outlook for January lowered the ceiling for spot gas prices this winter to less than $7/Mcf. The agency last month predicted that winter spot prices would stay below the $9/Mcf mark (see NGI, Dec. 18, 2006).

Citing unseasonably warm weather and reduced natural gas demand, the Energy Information Administration (EIA) in its Short-Term Energy Outlook for January lowered the ceiling for spot prices this winter to less than $7/Mcf. The agency last month predicted that winter spot prices would stay below the $9/Mcf mark (see Daily GPI, Dec. 13, 2006).

The cash market continued to move higher at most points Friday, but at a substantially reduced rate from the spikes seen on Monday, Tuesday and Thursday of last week. Several locations were flat to nearly a quarter lower, reflecting forecasts that some areas would see a bit of moderation from cold weather over the weekend and the typical drop of industrial load.

While it is pursuing a reduced carbon power generation portfolio that includes a bold nuclear power plant play, Princeton, NJ-based NRG Energy, Inc.’s aggressive 10,000 MW, $15.9 billion long-term development plan is weighted toward an expectation that most of its new megawatts will come from natural gas- and clean coal-fired generation with a healthy dose of wind, according to a presentation Tuesday by CEO David Crane at NRG’s first day-long conference for financial analysts.

Southern California Gas said Monday that due to high inventories in its storage fields, it had reduced injection capacity by 60 MMcf/d. Then in a Tuesday update it said another 17 MMcf/d of injection was lost because of electrical repairs to the No. 8 main unit at its Playa Del Rey field.

In updating its late-May hurricane forecast for the Atlantic in 2006, the National Oceanic and Atmospheric Administration (NOAA) reported Tuesday that while it has reduced the number of storms it expects for the season, it still expects a more active than normal season.

In updating its late-May hurricane forecast for the Atlantic in 2006, the National Oceanic and Atmospheric Administration (NOAA) reported Tuesday that while it has reduced the number of storms it expects for the season, it still expects a more active than normal season.

Management consulting firm R.W. Beck reduced its calendar 2006 forecast for the Henry Hub price of natural gas to $7.60/MMBtu. The new price is $1.40 lower than the $9/MMBtu price R.W. Beck predicted during the first two quarters of 2006.

Reduced demand for natural gas in the electric generation and residential markets, combined with bulging inventories for this time of the year, are setting the stage for weaker spot gas prices throughout much of the year, according to the Energy Information Administration’s (EIA) Short-Term Energy and Summer Fuels Outlook that was released Tuesday.