Markets

Concerns about the lack of contingency plans for outages in major natural gas infrastructure were aired Thursday at the California legislature’s first hearing in response to the three-month-old leak in a gas well at Southern California Gas Co.’s (SoCalGas) Aliso Canyon underground storage facility in the Santa Susana Mountains.

There may be light at the end of the tunnel for slumping natural gas prices, according to the Energy Information Administration (EIA), which said Monday it expects the benchmark Henry Hub to average $2.65/MMBtu in 2016 and $3.22/MMBtu in 2017.

Next-day gas weakened in trading Monday, led by declines in the Northeast approaching a half dollar. A weak power environment made incremental purchases of gas for power generation less appealing, and gains in the Rocky Mountains and California were unable to offset not only soft eastern pricing, but also broad weakness in the Gulf, Midwest, and Midcontinent.

February natural gas is expected to open 2 cents higher Friday morning at $2.16 although market observers suggest maintaining a short position. Overnight oil markets surged.

Natural gas for weekend and Monday delivery was little changed in Friday’s trading in spite of a dangerous blizzard bearing down on large eastern population centers.

February natural gas is expected to open 2 cents higher Thursday morning at $2.14 as traders anticipate a government report showing the largest storage withdrawal of the season. Overnight oil markets weakened.

Natural gas futures retreated after the Energy Information Administration (EIA) reported a storage withdrawal that was less than what traders were anticipating.

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.

Next-day natural gas at most points was off about a nickel on Wednesday, but healthy gains in the Northeast ahead of Friday’s forecasted blizzard resulted in a miniscule national gain. The NGI National Spot Gas Average added 3 cents to $2.31, and the Northeast managed a gain of 23 cents.