August natural gas retreated moderately Tuesday, but risk managers don’t see any change in the overall market landscape and suggest that a severe storm may be required to change client’s risk assessments. At the close August had eased 1.3 cents to $4.533 and September had fallen 1.3 cents as well to $4.511. August crude oil rose $1.57 to $97.50/bbl.
Articles from Severe
In the article “Southwest Gas Shutoff Aftermath Lingers” (see Daily GPI, March 30), NGI incorrectly stated that during a severe freeze in February “some 40,000 retail gas customers experienced shut-offs in New Mexico, with thousands more in certain areas of southern Arizona.” The 40,000 number is incorrect. The sentence should read “Thousands more were affected in other areas of New Mexico and certain areas of southern Arizona.” NGI regrets the error.
The Line 523F-100 line-lowering project is being extended by one week through March 18 due to severe weather resulting in delays, Tennessee said. The work, previously projected for completion by Friday (March 11), is causing suspension of physical flow at the Thomas Cenac 1 (CI) and Lapeyrouse Plant Dehydration meters.
Severe weather conditions early this month caused a double whammy for the two interstate natural gas pipelines serving the Southwest, and the result was curtailments by some of the distribution utilities, particularly in New Mexico, representatives from Transwestern and El Paso Natural Gas pipeline units told a U.S. Senate energy committee informational hearing Monday in Albuquerque, NM.
Although the return of wintry weather to much of the Midwest, Northeast and Mid-Atlantic was not as severe as the blizzard-beset period in January and the first half of February, and was already due to start moderating as soon as Wednesday, it was enough to generate price gains almost across the board Tuesday.
Prices fell at a large majority of points Wednesday as North America’s latest siege of frigid weather was expected to be less severe and of shorter duration than the one that proved to be so troublesome a week earlier. Many traders were looking ahead to next week when the forecast calls for above-normal temperatures in much of the eastern two-thirds of the U.S.; moderation will already be under way in many areas by the weekend.
Just when it had seemed the whole market was finally in agreement on further severe cold through the rest of January and the corollary that a couple of mostly bullish weeks were upcoming, prices got thrown for a loop again. Doubts were arising again about how severely cold it will be in the closing weeks of the month. Whereas flat to much higher numbers had reigned throughout the market Wednesday, only a few locations that were flat to up nearly 20 cents avoided a near-total turnaround into negative territory Thursday.
Northeast citygates and a few other locations, mostly in the West, were able to get a price boost from the severe cold expected to be occupying most of Canada and the U.S. by the start of this week. The rest of the market appeared to pay little attention as losses of less than a dime dominated.
Despite some of the year’s coldest weather being on the way in several regions — outstripping even the often-severe conditions through the middle of last week — a large majority of the cash market recorded moderate losses Friday. The previous day’s prompt-month futures drop of 17.1 cents and the weekend decline of industrial load tended to offset the expected return of major heating demand.
After four years of severe deterioration, gas-field contractors say the bottom of the slump is behind them and are predicting that Canadian drilling will increase this year.