NATURAL GAS / PART 1 - North American Information
NYMEX Hub Natural Gas Ends Up On Technicals, Weather
NEW YORK, Oct 29 - NYMEX Hub natural gas futures ended higher on Thursday in a sluggish session, with some technical buying and concerns about Hurricane Mitch and a colder weather forecast lifting the complex, industry sources said.
December climbed 2.4 cents to close at $2.348 per million British thermal units after trading Thursday between $2.295 and $2.375. January settled 3.1 cents higher at $2.508. Other deferreds ended up by 0.7 cent to 2.5 cents.
''If it was just Mitch, people would be selling gas by the boatload, but because of this cold air mass coming, people are going to wait to see how the cash reacts to the first winter test,'' said one Midwest trader, referring to a revised 10-day forecast calling for a shot of Canadian cold next month.
While most did not expect Mitch to pose a serious threat to U.S. Gulf of Mexico gas production, traders said some shorts ran for cover after National Hurricane Center (NHC) comments this afternoon that Mitch could move into the Gulf and head north toward the U.S. coast.
Traders said Wednesday's AGA storage report showing a 36- bcf weekly stock build also lent some support.
But they agreed the bottom line was weather, and without much colder temperatures to stir demand, few saw much upside, particularly with inventories still 234 bcf, or 8 percent, above last year.
Mitch weakened to a tropical storm Thursday and was centered near the Honduran city of Limon, with maximum sustained winds dropping to below 75 mph. NHC said the storm may drift west-northwest or northwest later today, possibly taking it to the tip of Mexico's Yucatan Peninsula and into the Gulf of Mexico. It could regain strength if it moves back over water, the center said.
WSC expects Northeast and Mid-Atlantic temperatures to range from normal to several degrees F below normal Thursday through Saturday, then warm to normal or slightly above Sunday and Monday. Above normal readings in the Southeast and Florida will moderate to about seasonal levels by Monday.
In the Midwest, above normal temperatures Thursday and Friday will gradually cool to normal or slightly below by Monday. Readings in Texas will range from two to six degrees above normal Thursday to four to eight degrees below normal Sunday and Monday, while the Southwest will see mostly below normal temperatures for the period.
Chart traders still saw December resistance first in the $2.38-2.41 area, then at $2.44 and at Monday's high of $2.63. Major selling should emerge at the September highs in the $2.715 area. Support was pegged at Wednesday's low of $2.25 and then at the Sept. 2 low of $2.14.
In the cash Thursday, Henry Hub swing quotes on average firmed several cents to the low-to-mid $1.70s, with November Hub talked on either side of $2.00, up three cents. Midwest day gas firmed five cents to the mid-$1.60s, while November was talked at about $2.00. In the West, swing gas on El Paso Permian firmed more than five cents to about $1.70, with November pegged in the low-$1.90s.
Chicago city-gate was talked more than five cents higher in the low-$1.80s, while November gas in Chicago was pegged at $2.15. New York day quotes slipped slightly to the low-$1.90s, but November was talked from the high-$2.20s to low-$2.40s.
The NYMEX 12-month Henry Hub strip gained 4.5 cents to $2.277. NYMEX said an estimated 44,295 Hub contracts traded today, down sharply from Wednesday's revised tally of 149,316.
US Next-Day Spot Gas Prices Lag Nov By 25-30 Cents
NEW YORK, Oct 29 - U.S. spot natural gas prices recovered slightly for swing business but still lagged the November bidweek market by about 25 cents to 30 cents, industry sources said Thursday.
Swing gas prices at Henry Hub were quoted widely at $1.67-1.78 per mmBtu, with Nov. 1 business seen trading around $2.00.
In the Midcontinent, next-day prices rebounded into the mid-$1.60s, while November pricing still carried about a 25- to 30-cent premium in the high-$1.90s to low-$2 area.
Chicago city-gate prices were quoted around $1.80 for Friday and at $2.15 for next month.
In west Texas, El Paso Permian and Waha gas traded at $1.63-1.75 for Friday and about $1.91-1.95 for November. The San Juan markets were also separated by about 25-30 cents, with next-day business seen at $1.63-1.73 and November prices quoted at $1.89-1.91.
The ongoing San Juan lateral outage, affecting about 625 million cubic feet per day (mmcfd) of gas out of a total of 800 mmcfd, is expected to last through Saturday. The San Juan lateral runs from Ignacio, Colo., to Blanco, N.M.
On the East Coast, New York city-gate prices were quoted around $1.90 for Friday and in the high-$2.20s for November.
Normal to below-normal temperatures are expected to return to most of the U.S. starting this weekend in the western and central U.S. and moving into the East by early next week, according to Weather Services Corp.
Much below-normal temperatures are forecast for parts of the Southwest and stretching into the Rockies next week.
Traders were also keeping their eyes on forecasts showing the arrival of another blast of cold air in the upper Midwest by late next week, which is expected to linger into the following week.
Canadian Spot Natural Gas Prices Firm Amid Less Supply
NEW YORK, Oct 29 - Canadian spot natural gas prices continued to firm Thursday in the west as the supply bubble seen earlier in the week in Alberta deflated somewhat, industry sources said.
Linepack on NOVA's system stood at 12.737 billion cubic feet per day (bcfd) on Wednesday evening, below the target linepack of 12.8 bcfd and down from more than 13 bcfd seen earlier this week.
Prices at Alberta's AECO storage hub tacked on an additional 21 cents to about C$2.24-2.27 per gigajoule (GJ).
November AECO prices were quoted little changed at C$2.55 per GJ.
At Westcoast Energy's Station 2 compressor, day prices climbed to about C$2.38-2.40.
Day prices at the Sumas/Huntingdon export point were talked a few cents higher near US$1.65 per mmBtu, while November business was quoted widely at US$2.08-2.20.
In the East, Niagara prices were mostly steady at US$1.70 per mmBtu, while November prices were talked at US$2.15-2.20.
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