Rise

The role of liquefied natural gas (LNG) in the U.S. gas supplymix continues to grow. Last year’s third quarter saw a significantpercentage jump in LNG imports, and that trend likely will continuewith LNG import facilities being reopened in Maryland and Georgia.

While most of the market relaxed Wednesday with flat to slightlyhigher price performance, the Northeast was battening down thehatches in preparation for a rare visitor of late: honest togoodness winter weather like they used to have in the old days. Asa result, delivered prices in the Northeast shot higher bydouble-digit amounts, led by a spike of more than half a dollar toaround $3.20 for Transco Zone 6-NYC.

It is often said markets can fall twice as fast as they rise,and that has never been more evident than it was in the natural gasfutures market over the past two weeks. After all, what took bullsfive and a half days to produce, took the bears just two and a halfto knock down. With a 7.8-cent decline to settle at $2.444, theJanuary contract was 26 cents below Monday’s highs and 0.2 centsbelow its Dec. 10 settle.

Amid confirmation that volumes of exports to the United Statesare on the rise and confident predictions that prices will staystrong, Canadian natural gas drilling is accelerating rapidly. Thenumber of gas-well completions in western Canada is expected to hitat least 8,200 next year.

Amid confirmation that volumes of exports to the United Statesare on the rise and confident predictions that prices will staystrong, Canadian natural gas drilling is accelerating rapidly. Thenumber of gas-well completions in western Canada is expected to hitat least 8,200 next year.

A Gulf Coast producer figured it had to be “storm hype”outweighing a sharply lower gas futures screen and causing nearlyall cash markets to soar by a dime or more Monday. Even mild tocool temperatures and the additional negative influence of Novembercrude oil futures plunging by 78 cents to settle below $24/bbl forthe first time in weeks failed to avert substantial upticks forspot gas.

Cash prices rode a soaring October futures contract,stilll-strong power generation demand and the remote threat ofTropical Storm Floyd to higher levels again Thursday. Gains wereslowing down from Wednesday’s pace but ranged from 2-3 cents at afew points to about a dime at many of them.

Few traders would dispute that Wednesday was a classic day forwanting to buy early and sell late. Sources reported prices risingsteadily during trading at virtually every point, with the highends of ranges occurring late in the morning. Increases of a dimeor more dominated the market, and Northeast citygates were seeingthe high side of $3 again in some deals.

Cash prices rode the continuing tropical storm news and aninitially higher screen to further gains Wednesday, but there weresigns that the big run-up had just about run its course. Mostincreases in the East were between about a nickel and a dime. Whilethat range also held true in much of the West, northern Californiaonce again tended to outpace the general market with dime-or-moreupticks at Malin and the PG&E citygate.