NATURAL GAS / Market Wrap Ending 12/2/98
Wednesday December 2, 4:50 pm Eastern Time
NYMEX gas ends down, Jan hits new low after AGAs
NYMEX Hub natgas futures, hit by technical selling when an early bout
of short covering faded, mostly ended down Wednesday in moderate
trade, then lost more ground on ACCESS after a bearish weekly
inventory report.
In the day session, January skidded 7.2 cents to close at $1.886 per
million British thermal units, then dipped on ACCESS to a new contract
low of $1.83 shortly after the AGA report.
Earlier, February settled 5.9 cents lower at $1.931, then slipped to
$1.89 after the weekly storage data, also a new benchmark. Most other
months ended down 0.1 to five cents.
''It's an extremely bearish number. It's almost winter, and we're
still building stocks,'' said one East Coast trader, adding shorts
rushed to cover early today amid forecasts for some cooler weather
next week.
AGA said Wednesday U.S. gas stocks rose last week by eight bcf, well
outside Reuter poll estimates for a 15-25 bcf draw. Overall storage
stands at 3.077 tcf, or 95 percent of capacity, versus last year's
total of 2.606 tcf, which was 82 percent full.
Eastern inventories fell seven bcf to 95 percent of capacity.
Consuming region west storage rose eight bcf for the week. Stocks in
the producing region gained seven bcf.
WSC still expects above to much-above normal temperatures over most of
the U.S. through Sunday, with the Midwest climbing to as much as 25
degrees F above normal. The one exception was the West, where readings
have dipped to normal or slightly below normal and are expected to
stay that way for the period.
Cooler weather was forecast for the Midwest early next week, with
temperatures expected to moderate to about seasonal levels. The
western U.S. is also expected to see normal to below-normal
temperatures.
Technically, January support was now seen at tonight's contract low of
$1.83 and then at prominent spot continuation lows of $1.78 and $1.61,
which is the spot low for the year.
January resistance was pegged first at yesterday's gap between $2.06
and $2.19, then at $2.27 and in the $2.35 area.
In the cash Wednesday, Henry Hub swing quotes were little changed at
about $1.40. Midcon pipes also were flat in the low-to-mid $1.30s. In
the West, El Paso Permian firmed slightly to about the $1.40 level.
Gas at the Chicago city gate held steady at about $1.50, while New
York also was unchanged at about $1.80.
The NYMEX 12-month Henry Hub strip slipped 3.2 cents to $2.07. NYMEX
said an estimated 67,274 Hub contracts traded today, down from
Tuesday's revised tally of 81,328.
Wednesday December 2, 5:11 pm Eastern Time
U.S. spot natgas stabilizes after 75-cent plunge
U.S. spot natural gas prices stabilized Wednesday after plunging 70-75
cents from bidweek levels over the last two days, industry sources
said.
''The market pretty much bottomed out yesterday. It was a good 40
cents under the (NYMEX) screen. There's also supposed to be some cold
weather moving in next week,'' one Midwest trader said.
Cash prices at Henry Hub were quoted mostly steady at $1.40 per mmBtu,
but still down from about $2.10-2.15 during bidweek.
In the Midcontinent, swing prices also leveled off, with deals
reported done again in the low- to mid-$1.30s. Chicago city-gate was
pegged near $1.50.
In west Texas, swing Permian Basin prices were quoted in a narrower
range at $1.38-1.42, while San Juan gas was seen selling at
$1.38-1.45.
At the southern California border, however, prices strengthened by
about seven cents to $1.97-2.00 as cooler weather created some demand
in the area.
In the East, New York city-gate prices were quoted near $1.80, while
Appalachian prices were seen trading a little higher at $1.64-1.65.
Canadian natural gas prices mixed on weather, demand
Canadian natural gas spot prices were mixed on Wednesday as warm
weather continued to lower demand across North America, industry
sources said.
Prices at Alberta's AECO storage hub droppped about four cents from
Tuesday trade to C$2.07/2.08 per gigajoule. The January contract was
quoted at C$2.37 per GJ.
The January-March winter contract was pegged at C$2.32 per GJ.
Trade at Westcoast Energy's Station 2 compressor was discussed at
C$2.12/2.13 per GJ, up about five cents on the day as deliveries into
California from the San Juan basin were curtailed by a compressor
shutdown, marketers said.
Day business at the Sumas/Huntingdon border point also traded up to
US$1.62 per million British thermal units, about nine cents higher
than Tuesday.
To the east, prices at the Emerson export point were flat at US$1.46
per mmBtu, and Niagara business was discussed at US$1.55/1.57 per
mmBtu, up about two cents on the day.
Wednesday December 2, 4:18 pm Eastern Time
Canadian spot natural gas domestic prices - December 2nd
DOMESTIC (DEC SWING) $CDN/GJ $US/MMBTU
ALBERTA PLANT-GATE 1.93/1.98 1.35/1.39
ALBERTA BORDER - EMPRESS 2.06/2.11 1.44/1.48
STATION 2, B.C. 2.10/2.15 1.47/1.50
SASK. PLANT-GATE 1.93/2.98 1.35/1.39
TORONTO CITY-GATE 2.22/2.29 1.55/1.60
1-YR PCKGS - EMPRESS 2.54/2.59 1.78/1.81
AECO 2.05/2.10 1.43/1.47
N=notional. One yr package beginning Nov. 1, 1999.
Canada/U.S. dollar conversion based on Bank of Canada noon rate.
One year packages converted to U.S. dollars at a 12-month forward rate.
Canadian spot natgas export prices - December 2nd
EXPORT (DEC SWING) $CDN/GJ $US/MMBTU
HUNTINGDON B.C. 2.27/2.34 1.59/1.64
KINGSGATE B.C. (TO PNW) 2.30/2.37 N 1.61/1.66 N
MONCHY SASK 1.36/1.43 N 0.95/1.00 N
EMERSON MAN 2.06/2.13 1.44/1.49
NIAGARA ONT 2.20/2.27 1.54/1.59
Canada/U.S. dollar conversion based on Bank of Canada rate.
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