Snow

December natural gas is set to open 8 cents higher Monday morning at $2.70 even though clouds are darkening over the longer-term weather outlook. Analysts see a supportive political environment going forward and healthy prices in 2017. Overnight oil markets fell.

May natural gas is expected to open 2 cents higher Thursday morning at $1.93 as traders juggle a mix of short-term cooler weather along with a government report that is expected to show storage reaching an all-time high on a seasonal basis. Overnight oil markets were mixed.

Next-day physical natural gas at most points outside the East added a few pennies to a little more than a nickel in trading for Friday delivery.

December natural gas is set to open 3 cents lower Friday morning at $4.37 as traders await weather developments that could show changes from November forecasts, which for the moment are looking at near-maximum cold. Overnight oil markets rose.

As state and federal officials last week were assessing the potential for the drought to impact hydroelectric power this summer, California Independent System Operator (CAISO) on Thursday issued a conservation alert because of a shortage of natural gas supplies that underpin much of the state’s power generation.

The cash market on average gained 4 cents Wednesday for Thursday delivery as the midsection of the country continued to get lashed by snow, cold and generally winter-like conditions. California and Midwest points were strong, and other market centers posted more moderate gains. At the close of futures trading, June had eased 1.7 cents to $4.326 after posting a new 21-month high at $4.440 earlier in the day. July had fallen 1.5 cents to $4.379, and June crude oil was clobbered, falling $2.43 to $91.03/bbl.

A train derailment near the town of Parkers Prairie, MN, Wednesday morning spilled 20,000-30,000 gallons of crude oil into a field, but frozen, snow-covered ground was “a saving grace” that should keep environmental damage to a minimum, a Minnesota Pollution Control Agency (MPCA) spokesman told NGI’s Shale Daily. Fourteen of the Canadian Pacific Railroad train’s 94 cars derailed and oil from three of them was leaked, the spokesman said. “They’re going to be able to recover most, if not all” of the oil, according to MPCA spokesman Dan Olson. No injuries were reported.

Thanks to volatile Northeast gas prices, the national average for physical natural gas traded Thursday for Friday delivery dropped nearly 50 cents.

An investigation continued Thursday in the natural gas explosion that destroyed most of a city block in a shopping district Tuesday night in Kansas City, MO. A snow storm that blanketed the region Wednesday night had slowed progress, officials said.