Gov gas comments thought this part interesting:
"Also last week, EIA learned that a reclassification of 74 Bcf from base
gas to working gas made by an operator in Michigan in January
(retroactive to October 2000) had been reversed, thereby causing EIA-
estimated inventory levels for the East Region and the national total to
be reduced by this amount"
Full text:
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Despite the end of winter the week before, winter weather returned in
force last week and lingered past midweek in much of the nation,
driving demand and spot prices up through Wednesday, March 28. By
then, the spot price at the Henry Hub had risen 38 cents from the
previous Friday to $5.59 per MMBtu. Likewise, the futures contract
for April delivery continued its upward climb begun Thursday of the
preceding week, culminating in Tuesday's surge of almost 30 cents per
MMBtu to a settlement level ($5.621) not seen for April gas since mid-
February. But from these respective weekly high points, cash and
futures prices trended downward for the rest of the week. The April
contract closed out on Wednesday at $5.384 per MMBtu a one-day
loss of $0.237. Last year, the April contract closed at $2.900. The spot
price for West Texas Intermediate crude oil followed a similar path, but
ended the week with a loss of $0.60 per barrel from the previous
Friday, ending trading on Friday, March 30 at $26.35, or $4.54 per
MMBtu.
Storage: The rate of working gas withdrawals was much lower than
normal for the week ended Friday, March 23, the next to last full week
of the traditional heating season. The American Gas Association
(AGA) estimated that working gas declined by 12 Bcf, which is just 25
percent of average net withdrawals for this week over the preceding 5
years. (According to AGA, an additional 1 Bcf of base gas was
withdrawn in the Producing Region, making a total of 9 Bcf of base gas
depleted over the past 4 weeks.) The West Region, continuing to enjoy
warmer-than-normal temperatures, had a second week of net injections,
yet stocks remained at half the EIA-estimated 5-year (1995-99)
average. Estimated net withdrawals of 13 Bcf were reported for the
East Region just 29 percent of the average for the preceding 5 years.
Also last week, EIA learned that a reclassification of 74 Bcf from base
gas to working gas made by an operator in Michigan in January
(retroactive to October 2000) had been reversed, thereby causing EIA-
estimated inventory levels for the East Region and the national total to
be reduced by this amount. With 8 more days remaining in the heating
season, the revised EIA-estimated total stocks of 714 Bcf as of March
23 are 44 Bcf lower than EIA's previous record low end-of-season
level of 758 Bcf on March 31, 1996.
Spot Prices: Gains mostly in the 20-to-45-cent range between Friday
and last Wednesday at most market locations were offset at least
partially by losses on Thursday in the 5-to-30-cent range in those same
markets, as unusually cold temperatures began to moderate. By Friday,
despite 2 days of losses, spot gas at the Henry Hub, trading at $5.32 per
MMBtu, was up $0.11 from the previous Friday. The exceptions were
in the Rockies and in the San Juan Basin in New Mexico, where prices
generally had Friday-to-Friday declines in the vicinity of 75 cents.
Most Rockies locations ended the week just under $4.00, while El
Paso-San Juan ranged from $3.84-$4.01. In Friday's trading session,
covering a weekend containing the beginning of a new month, prices
for delivery on SOCAL for the final day of March moved up $3.12
from the previous Friday, but, at $12.37 per MMBtu for Sunday and
Monday delivery, the increase eroded to $1.24. At the PG&E citygate,
gas for next-day delivery was up $1.48 from the previous Friday, but
gas for delivery Sunday and Monday, at $8.52, was actually down 25
cents.
Futures: The futures contract for April delivery ended trading $0.105
higher than when it became the near-month contract (February 27), and
its closing price of $5.384 per MMBtu was the second highest
settlement price since that date. The April contract had an impressive
4-day run of gains through Tuesday, increasing nearly 12 percent from
the previous Thursday's settlement level ($5.041), on the strength of
unusually cold weather. However, the low storage withdrawal number
seemed to reduce upward price pressures associated with low inventory
concerns, and a flurry of traders liquidating long positions contributed
to April's final-day $0.237 decline. The May contract continued the
downward trend during its first 2 days as the near-month contract,
dropping $0.428 to end the week at $5.025 per MMBtu.
Summary: Colder-than-normal temperatures fostered cash-price
increases that were partially offset late in the week as temperatures
moderated and futures prices dropped significantly. With National
Weather Service 6-10 and 8-14 day temperature outlooks calling for
normal temperatures for most of the nation, the next several weeks
are likely to experience low demand levels typical of the normally
low-demand spring shoulder season. |
