Returning

Feeling support from returning power generation load as summer-like heat began to reassert itself and also from a 17.5-cent screen gain on the previous Friday, cash prices rose at virtually all points Monday.

Due to a little taste of winter-like cold returning to northern market areas and the possibility of early storage refills already getting under way, prices were up at nearly all points Monday.

After returning to normal linepack levels over the weekend after a lengthy period of dealing with high linepack, Kern River was faced with a different problem Tuesday: low linepack in all four segments that the pipeline attributed to drafting of its system and loss of supply during the preceding 24 hours. “If drafting continues, Kern River will take whatever actions are necessary to ensure the integrity of the system is maintained,” it said.

With traders returning from the long holiday weekend, the bearish move still appeared to be intact Tuesday as natural gas futures prices continued to tumble. After opening under $11 at $10.750, February natural gas managed no higher than $11 before settling at $10.626, down 59.9 cents on the session.

On one side, Gulf of Mexico shut-ins are returning faster than expected, and imports of Canadian gas have increased; on the other the colder weather has arrived and LNG is going to Europe instead of the United States. These are the factors in play and behind the current high natural gas prices, FERC staff told the commissioners in a natural gas market update at Thursday’s regular meeting.

Power plant developer/operator Calpine Corp. Tuesday was directed by a Delaware court to work out a plan in the next week for returning more than $300 million in proceeds from oil/gas asset sales whose earlier distribution had been challenged by two sets of corporate bondholders. The monies need to be distributed back into The Bank of New York, a collateral trustee and one of the plaintiffs filing the lawsuit in the Delaware Court of Chancery.

Relatively mild weather, weak weekend demand, declining storage space and slowly returning Gulf production pressured prices much lower on Friday with quite a few points down more than a dollar and the majority off more than 60 cents from levels on Thursday.

The pace of returning Gulf of Mexico and Gulf Coast gas production appeared to have quickened over the weekend, and gas futures and cash prices reflected that trend in light trading on Columbus Day (Thanksgiving Day in Canada). Cash points tumbled between a nickel and 30 cents in the Northeast, 15-45 cents in the Gulf Coast, and 10-55 cents in the Midwest and Midcontinent.

William Hederman, director of the Office of Market Oversight and Investigations, has announced he will be returning to the private sector within the next few months and rumors are circulating that OMOI, created just over three years ago, will be dismantled or significantly reduced under new Federal Energy Regulatory Commission Chairman Joe Kelliher.