Despite continuing high heat levels in several areas and neutral guidance from prior-day futures trading, cash prices fell at all points except one Wednesday.
Only the Florida citygate’s rise of about a dime averted across the board softness. Otherwise the losses ran from about a nickel to 95 cents or so.
It was easy to see why Northeast citygates recorded some of the day’s largest losses. The region was about to see a significant cooling trend, with New York City’s high of 95 Wednesday due to be replaced by an 86 peak Thursday, and Boston was predicted to top out in the mid 70s Thursday.
The Upper Midwest also was due to see falling temperatures Thursday, but temperatures in Chicago were predicted to rise to just above 90 degrees. Very hot weather will continue unabated in the South and the Southwest, with highs around 100 degrees or more not uncommon. But mild conditions will dominate the Pacific Northwest and coastal California, and even inland California has seen peak temperatures recede to around 90.
The Florida citygate’s gain was prompted by Florida Gas Transmission (FGT) extending an Overage Alert Day into its fifth day Wednesday (see Transportation Notes). However, production-area quotes on FGT fell by about a dime or more.
The supply outage caused by a platform rupture on the offshore section of Southern Natural Gas is being alleviated to some degree as the pipeline allowed 12 receipt points upstream of the rupture to begin flowing about 150,000 Dth/d and said it would try to ramp up to pre-force majeure volumes in the near future (see Transportation Notes). Southern still expects to require two to three weeks to repair the leak in a 20-inch diameter leading away from its Gate 6 supply aggregation platform.
Evidence of how greatly the heat has increased gas load in the East came from Transco, which said it may be required to issue one of its rare OFOs because of experiencing extremely high power generation demand “and overall market requirements throughout its system as a result of unusually hot market-area temperatures.”
In addition, PJM Interconnection ordered Mid-Atlantic voltage reductions Wednesday and Consolidate Edison of New York implemented a brownout in Brooklyn to maintain control of its system (see story in Power Market Today).
A utility buyer in the South noted that his city was hitting the century mark in temperatures both Wednesday and Thursday. The Tennessee Valley Authority supposedly hit a peak-demand record Tuesday, he said. “I know they’re running some of their oldest gas-fired turbines in our area,” which is significant because those old turbines don’t have very good heat rates, he added. It’s cheaper than buying purchased power, he thought; but of course, that presumes someone has excess power to sell.
His company has greatly slowed down storage injections for August and will do so to an even greater extent next month, the buyer said.
The National Weather Service’s (NWS) forecast for the Aug. 13-17 workweek calls for above-normal temperatures throughout nearly all of the U.S. The only below-normal conditions will be in upper New England and in the western halves of Washington state and Oregon along with the coastal section of Northern California, NWS said. Normal readings in lower New England and the rest of the Northeast, and in eastern Washington, Oregon and a strip of central California, will buffer the areas expected to be below normal from the above-normal section. South and central Texas also will see normal temperatures, NWS said, with above-normal readings prevailing in all areas not previously described.
Reuters said its survey of 23 industry analysts found an average expectation of a 52 Bcf storage injection to be reported for the week ending Aug. 3. Estimates ranged from 40 Bcf to 65 Bcf, the news service said.
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