Sense

In the 2012-2015 time frame, liquefied natural gas (LNG) makes sense for the Pacific Northwest, which could be losing Canadian and U.S. Rockies supplies by then, according to a developer of a proposed Oregon LNG receiving terminal. And the prices of LNG supplies will be very attractive, NorthernStar Natural Gas CEO Paul Soanes said at an energy conference Thursday in Seattle.

FERC Commissioner Nora Brownell last week made the case for why it would make sense for the Commission to avoid adopting a one-size-fits-all approach to the crafting of a policy on incentives designed to boost investments in the nation’s transmission infrastructure.

Capital spending is on the rise for oil and natural gas producers, and their exploration and production (E&P) investment strategy appears to reflect a continuing sense of optimism in industry fundamentals, and in particular, a strong outlook for cash, Raymond James’ energy analysts said in a new report.

The cash market stanched its bleeding somewhat as the July aftermarket got launched Wednesday, in the sense that most price declines were smaller than the day before and a few scattered points were flat to higher. The highly temperature-sensitive Cheyenne Hub and CIG even managed genuinely substantial rebounds of 20-25 cents or so due to Rockies-area weather starting to heat up.

A run of rising prices was extended into its fourth day Thursday, but there were mixed feelings on whether the streak can be sustained any further. The latest gains ranged from about a dime to nearly half a dollar.

In a general sense Monday’s market resembled the Tuesday-Thursday trading period of last week in which many points were either flat or not much removed up or down from unchanged. The key difference Monday was somewhat greater volatility; instead of being limited to about a nickel’s movement in either direction, quotes ranged from about a dime lower to about 15 cents higher.

For the third time in the last four Thursdays, the natural gas futures market rallied higher following the release of surprisingly bullish storage news (164 Bcf withdrawal). And while bears are not ready to throw in the towel just yet, analysts and market-watchers agree that it is becoming easier to make the case that prices could move higher from current levels.

Natural gas traders do have a perverse sense of humor after all. Less than 24 hours after the Department of Energy revised downward its forecast for the average annual wellhead price this year to below $5.00, the futures market rocketed back above the $5.00 mark Thursday amid technical bullishness and following a slightly smaller-than-expected storage report (74 Bcf injection).

It didn’t make sense to a number of sources, but there it was: prices going up Tuesday everywhere except at Northeast citygates even as generally weak fundamentals continued to get even weaker. Not counting the Northeast, quotes rose by a nickel to about 20 cents across the board.