Markets

After nearly two decades of mastering turbulent markets for natural gas and liquid byproducts, a Calgary fixture of energy services is making a fresh start in the New Year on taking a leading role in the next generation of Canadian supplies.

Natural gas forward basis markets ended 2014 on a downslope, falling under the pressure of a bearish storage report and apparent little confidence in weather forecasts ahead of the New Year’s holiday.

Next-day gas prices soared on Monday, as a perfect storm of a precipitous forecast drop in temperatures, surging power prices and expected higher power loads all combined to push gas for Tuesday sharply higher.

As an outgrowth of severe natural gas price spikes a year ago, FERC at year-end approved a proposed tariff solution for California’s electric grid operator allowing for start-up and minimum load cost recovery for gas-fired generation plants that sometimes can be caught in weather-related gas price spikes.

Physical gas for weekend and Monday delivery was largely mixed in Friday’s trading as strength at New England, Gulf and Midcontinent locations was able to outmuscle weakness in the Marcellus and Rockies. The overall market gain was 10 cents.

February natural gas is expected to open 7 cents higher Friday morning at $2.96 as near-term weather forecasts turn supportive and traders await better selling opportunities. Overnight oil markets continued lower.

February natural gas is set to open 5 cents lower Wednesday morning at $3.04 as traders focus on a government inventory report that is expected to show sharply reduced gas usage. Overnight oil markets continued to tumble.

Natural gas futures retreated following the release of government storage figures showing a lower withdrawal than what the market was expecting.

Both physical and futures prices had the trajectory of a safe falling from a 10-story building in Wednesday’s pre-holiday trading.