There were still several softer points in the mix, but overall the cash market got even stronger Tuesday as heating load in northern market areas and to a lesser extent in the South continued to drive most points. The gains overcame negative guidance from Monday’s 11.8-cent decline by November futures, which expire Wednesday.
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Most of Market Softer; Ike Aimed at Houston
Although several eastern points managed to keep rising Friday, a solid majority of the market was softer as the Houston area braced for what was expected to be a direct strike by Hurricane Ike. Offshore production outages rose by small amounts, but low demand based on generally moderate to cool weather negated the cumulative supply losses to some extent. The weekend decline of industrial load added to the overall bearish mood.
Ike It or Not, Falling Prices Unperturbed by Storm
“Storm hype” just doesn’t seem to have the old price punch it used to. For the second week in a row the industry is seeing prices get substantially softer even as a hurricane heads into the Gulf of Mexico (GOM) production area. To be sure, the fact that the projected track of Hurricane Ike had been shifted more to the south — and thus farther from offshore infrastructure — was a major factor in prices dropping across the board Tuesday.
Fay’s Market Impact Minimal; Most Points Softer
There obviously was little, if any, “storm hype” in either the cash or futures markets Monday. Prices were softer at a slight majority of cash trading points as cooling load was expected to decline in some areas Tuesday while staying subpar for mid-August in others, while prompt-month futures fell 20.4 cents.
Northeast Dives Lead Retreat as Warm-Up Looms
As expected, a serious warming trend due to start Friday following widespread frigid weather at midweek induced softer prices at most points Thursday. Northeast citygates, which had seen huge spikes on Wednesday, recorded equally spectacular plunges Thursday.
Limited Cold Spurs Softness at Most Points
Most of the cash market was moderately softer in post-Christmas trading Wednesday as forecasts of sub-freezing lows had become rather scarce outside the Rockies and some locations in the upper Northeast. Activity was predictably light as some traders remained out of the office on holiday vacations and Boxing Day was being observed in Canada.
Northeast, LA Points Sole Exceptions to Softness
As a marketer had predicted, prices were softer at a large majority of points Thursday due chiefly to a 35.4-cent plunge by the expiring December futures contract the day before and milder weather returning to the South. Northeast citygates, where temperatures are falling and will bottom out around freezing or lower Friday, saw nearly all of the flat to about 75 cents higher exceptions to the overall market trend.
Canada’s Energy Trust Sector Warned to Balance Spending
Canada’s oil and natural gas royalty trusts this year should see higher returns on stronger commodity prices and softer oil services costs, but they have to balance capital spending and unitholder distributions, CIBC World Markets noted in a report issued last week. Canada has more than 30 oil and gas royalty trusts with a combined market capitalization of C$72 billion.
Canada’s Energy Trust Sector Seen Stronger
Canada’s oil and natural gas royalty trusts this year should see higher returns on stronger commodity prices and softer oil services costs, but they have to balance capital spending and unitholder distributions with more balance, CIBC World Markets said in a report.
What High Gas Prices? UniSource Drops Gas Charge
Facing softer wholesale natural gas prices this winter compared with last year, Tucson-based UniSource Energy last month dropped a surcharge for its gas utility customers in northern Arizona that are served by its UniSource Energy Services (UES) unit. UES’s per-therm gas service rate in December will be $1.12, and the utility said it expects the rate to remain the same through the winter.