Regions

Natural gas price gaps among different North American regions are narrowing as the recent surge of major pipeline expansions has opened bottlenecks and leveled the supply playing field. Sources indicated that some spreads will grow again when heating season arrives, but for the foreseeable future near-parity numbers will remain the general norm across the North American spot market.

Natural gas price gaps among different North American regions are narrowing as the recent surge of major pipeline expansions has opened bottlenecks and leveled the supply playing field. Sources indicated that some spreads will grow again when heating season arrives, but for the foreseeable future near-parity numbers will remain the general norm across the North American spot market.

Ignoring cooling load that was dwindling for the weekend in some areas and staying light to moderate at best in several other regions, the cash market relied almost entirely on the previous day’s futures spike in recording gains at a large majority of points Friday. Prices also were essentially unfazed by the drop of industrial demand in a weekend market.

Receding cooling load in several regions combined with the previous day’s drop of 14.6 cents by August futures to take the cash market lower at virtually all points Thursday. But a major screen rebound was expected to be mirrored in Friday’s cash trading.

Cash prices fell virtually across the board Friday, depressed by forecasts of moderate weather in most regions and the previous day’s drop of just over a quarter by April futures. The decline of industrial load during a weekend was an additional, albeit minor, bearish influence.

There will be more fuel switching from coal to natural gas by power generators in some regions of the country, such as Texas and the Southeast, said Calpine Corp. CEO Jack Fusco. He cited emerging climate change policies, depressed gas prices and the competitive heat rates of gas-fired combined-cycle plants.

There will be more fuel switching from coal to natural gas by power generators in some regions of the country, such as Texas and the Southeast, said Calpine Corp. CEO Jack Fusco. He cited emerging climate change policies, depressed gas prices and the competitive heat rates of gas-fired combined-cycle plants.

After falling 20.3 cents on Wednesday and Thursday despite a winter freeze in a number of U.S. regions and a fairly bullish storage withdrawal, January natural gas futures continued the push on Friday by putting in a new low at $5.267 in afternoon trading before settling at $5.334, down 21.4 cents from Thursday’s finish and 15.4 cents lower than the previous week’s close.

The cash market was showing more signs of weakness Wednesday as the latest blast of arctic cold was forecast to be receding in some regions. Many points in the Midcontinent and West that had been rising Tuesday were falling Wednesday by substantial amounts, and in many cases the remaining gains were considerably smaller than on the day before.