Sources

Mindful of declining production in its traditional Gulf of Mexico area supply base, Atlanta, GA-based AGL Resources is focusing increasingly on the potential for LNG, including increased supplies from the two established LNG import terminals on the southeastern Atlantic Coast and possibilities for another import terminal on its waterfront property in an industrial area near Norfolk and Virginia Beach, VA, AGL Chairman Paula Rosput said Wednesday.

Mindful of declining production in its traditional Gulf of Mexico area supply base, Atlanta, GA-based AGL Resources is focusing increasingly on the potential for LNG, including increased supplies from the two established LNG import terminals on the southeastern Atlantic Coast and possibilities for another import terminal in an industrial area near Norfolk and Virginia Beach, VA, AGL Chairman Paula Rosput said Wednesday.

Sources cited increasing heat levels, particularly in the Midwest and Northeast, as the primary reason for fairly sizeable price rallies Tuesday at a majority of points. Only California, which was under a double-OFO whammy, saw moderate softening, although its depressant effect on western markets in general resulted in flat quotes for San Juan Basin and a few Rockies points.

With sources in the Northeast and Midwest feeling that they could finally say good-bye to Old Man Winter after the dude had prolonged his stay to uncomfortable lengths, it was hardly surprising to see all points united in mostly moderate softening Tuesday. Northeast citygates led the losses that ranged from about a nickel to 20 cents. Most were on either side of a dime.

Various sources mentioned the previous day’s spike in petroleum-based futures, continuing cold weather in northern market areas combined with an anticipated winter storm thrust into western reaches of the Southeast, and popular expectations of a 200 Bcf-plus storage withdrawal report as reasons for a moderate rebound in cash prices Tuesday.

As NGI sources had predicted, late declines in Monday’s swing trading were a strong indicator that the cold weather-induced price spikes that began the week had little staying power. Sure enough, quotes Tuesday ranged from flat to down about a quarter in deals covering through the end of the month.

Sources could think of nothing besides the potential for Tropical Storm Henri as an explanation for the screen managing a gain of just over a nickel and cash prices going up between 2 cents and about a dime. Temperature-related demand fundamentals are still quite weak as an advancing cold front keeps even the South unusually mild for late summer. As on the day before, the only serious heat remains in an area ranging from the desert Southwest through Oregon.

As NGI sources had predicted, residual support from Thursday’s screen gain of nearly 16 cents (along with spikes in the rest of the energy futures complex) proved sufficient to outweigh weekend losses of cooling load in the Northeast and Midwest. The result was upticks ranging from about 3 cents to almost 15 cents in most of Friday’s cash market, although flat to moderately lower numbers were recorded at several Northeast citygates and western points.

Sources expect Tuesday’s generally mild softness to continue as air conditioning load recedes in the East and there is no near-term tropical storm threat to offshore Gulf of Mexico production. As if to reinforce their outlook, the energy futures complex experienced steep price dives Tuesday, with the August natural gas contract falling nearly a quarter and its crude oil counterpart plunging about $2 in expiration-day profit taking.