Expectations of another massive weekly storage injection figure — confirmed by AGA at 117 Bcf for the week ending June 1 — combined with milder weather and high line pack, put significant downward pressure on cash and futures prices yesterday. Most eastern points were down 20-30 cents, while California prices into PG&E at Topock dipped below $3 in response to a high inventory operational flow order. SoCal-Topock prices dropped more than a dollar.
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Price Drops Moderate at Most Points, Biggest in California
As expected after the big injection volume in AGA’s weekly storage report and the Nymex downturn in reaction, cash prices resumed softening Thursday at all points. But outside of California declines ranging from nearly a quarter (border-SoCalGas) to a little more than a dollar (Malin), other markets fell generally between a nickel and 15 cents with only a few scattered points exceeding 15 cents.
Salomon Sees Strong Injections, Rising Production
Salomon Smith Barney (SSB) said in a weekly E&P report that it expects gas storage injections to continue to strongly outpace last year and consequently put further downward pressure on gas prices in the near-term. Over the long-term, however, SSB expects current underlying supply/demand dynamics will balance out in a price range of $4 to $5/MMBtu.
Bearish Storage Data Demotes Prices Again
To say the weekly storage report has had an impact on thenatural gas futures market lately would be a gross understatement.Following an impressive 69 Bcf injection on Sept. 1, the futuresmarket dropped 26.6 cents the very next day. Then a week later,following the release of a relatively small 66 Bcf refill, themarket took a wild, 24-cent ride higher to close the session in themid-$2.80s. Now, a week later the question that everyone is askingis whether we will see another big move today. At first glance theanswer to that question was a resounding “yes” because shortlyafter the storage figures were released the October contracttumbled a dime lower in after-hours Access trading.
Spot Gas Market Wellhead Price
Natural Gas Intelligence the weekly gas market newsletterpublished : August 16, 1999
Current Market Prices
Natural Gas Intelligence the weekly gas market newsletter published : August 16, 1999
American Gas Storage Survey
Natural Gas Intelligence the weekly gas market newsletter
Industry Talks on NOPR, NOI ‘Suspended’
The formal, bi-weekly negotiations on major gas restructuringinitiatives, which had been under way for more than two months,were “suspended” when various industry segments decided that a”unified proposal” wasn’t likely, sources said. This action was nottotally unexpected (See NGI, March 1 issue).
Dialogue on NOPR, NOI ‘Suspended’
The formal, bi-weekly negotiations on major gas restructuringinitiatives, which have been under way for two months, were”suspended” last week when various industry segments agreed that a”unified proposal” was not likely, sources said. This action wasnot totally unexpected.
Salomon Sees 522 Bcf Storage Surplus by April
In its weekly outlook on gas storage levels, Salomon SmithBarney (SSB) raised its forecast of expected storage levels at theend of the winter heating season by 117 Bcf from the previous week.The firm, which has grown increasingly bearish because of theclimbing storage surplus, now expects there to be 1,423 Bcf ofworking gas in storage on April 3, which would be 522 Bcf more thanthe four-year average on that date and 364 Bcf more than the sametime last year. Working gas levels in storage as of Feb. 12 were at1,887 Bcf, which is 462 Bcf more than last year on the same date,according to the American Gas Association (AGA).