NATURAL GAS PRICING & RELATED / North American In Scope
NYMEX natural gas ends down, ACCESS recovers after AGAs
NEW YORK, Nov 4 - NYMEX Hub natural gas futures, lightly pressured
Wednesday by profit taking, mostly ended lower in sluggish trade, then
slipped on ACCESS but quickly recovered after a slightly bearish
weekly inventory report.
In the day session, December closed down 4.1 cents at $2.395 per
million British thermal units after trading between $2.375 and $2.435.
On ACCESS, the spot contract slipped to $2.367 shortly after the AGA
data, then recovered to $2.41.
January settled 5.7 cents lower at $2.538. Other deferreds ended down
by one-half to five cents.
''It (the AGA number) was higher than expected. The market sold off
initially (on ACCESS), but it came right back when December couldn't
break below $2.35,'' said one Midwest trader, noting firm cash prices
in the face of the season's first cold snap this week helped underpin
paper.
AGA said Wednesday U.S. gas stocks rose last week by 48 bcf to 97
percent of capacity, above Reuter poll estimates in the 30-40 bcf
range. Overall storage jumped to 286 bcf, or 10 percent, above a year
ago.
Eastern inventories rose 29 bcf to 99 percent of capacity and were
four percent above last year. Consuming region west storage, which
climbed eight bcf for the week, was up 18.5 percent from 1997 levels.
Stocks in the producing region gained 11 bcf and stood 20 percent over
year-ago.
While cold weather this week helped firm the cash, many expected only
limited upside from here, noting physical gas was still lagging
futures by more than 30 cents and there was plenty of gas in storage
ahead of winter.
WSC expects Northeast and Mid-Atlantic temperatures to remain two to
eight degrees F below normal through Sunday. Below normal midweek
readings in the Southeast and Florida should warm to about normal
levels by the weekend.
In the Midwest, much below normal readings Wednesday will moderate to
two to six degrees below normal by Sunday. Texas mostly will range
from two to eight degrees below normal for the period, while the
Southwest will stay mostly below normal.
Chart traders said selling kicked in early today when December failed
to get above unchanged by stalling at $2.435. They still pegged
December resistance at yesterday's high of $2.46, then in the $2.52
area and at last week's high of $2.63.
Support was seen first at Monday's $2.24 low and then at the September
2 low of $2.14.
In the cash Tuesday, Henry Hub swing quotes on average firmed one to
two cents to the $2.10-2.11 area. Midcon pipes gained about a nickel
to the $2.04-2.09 level. In the West, El Paso Permian was pegged in
the mid-to-high $1.90s, also up several cents.
Swing gas at the Chicago city gate was two to three cents higher in
the low-$2.30s, while New York was talked little changed in the
high-$2.40s.
The NYMEX 12-month Henry Hub strip fell 2.5 cents to $2.297. NYMEX
said an estimated 41,225 Hub contracts traded today, down from
Tuesday's revised tally of 55,689.
U.S. spot natural gas prices supported by cold weather
NEW YORK, Nov 4 - U.S. spot natural gas prices were well supported
Wednesday by continuing cold weather across much of the U.S., a trend
that is expected to continue into early next week, industry sources
said.
Gas prices at Henry Hub were quoted at $2.08-2.14 per mmBtu, with most
business reported done at $2.09-2.12, indicating a gain of about one
cent from Tuesday.
In the Midcontinent, swing prices were talked mostly at $2.06-2.08,
with Northern at Demarcation pegged near $2.16.
At the Chicago city-gate, prices were quoted equally firmer at
$2.30-2.31.
In west Texas, prices were little changed as the cooling trend left
demand at a minimum in the Southwest.
El Paso Permian gas traded at $1.94-2.00, while the San Juan market
hovered in the low- to mid-$1.90s, sources said.
In the East, Appalachian deals were reported done in the mid-$2.40s on
Columbia Gas, while New York city-gate prices were in the mid- to
high-$2.40s, sources said.
Meanwhile, injection estimates for today's American Gas Association
storage report ranged mostly from 30 bcf to 40 bcf, versus a five bcf
draw a year ago.
Canada natural gas prices soften further in Alberta
CALGARY, Nov 4 - Canadian spot natural gas prices softened further in
Alberta on Wednesday, but cold weather in the U.S. maintained upward
pressure on export pricing, industry sources said.
Prices at Alberta's AECO storage hub slipped about five cents on
Wednesday, to C$2.38/2.43 per gigajoule, despite continued tight gas
supply, one Calgary-based marketer said. ''The pricing is all
weather-related right now,'' he said, adding day prices were expected
to remain flat into next week, barring an unexpected cold snap.
The AECO December contract was quoted at C$2.84/2.85 per GJ, and the
December/October contract was discussed at C$2.82/2.83 per GJ.
Trade at Westcoast Energy's Station 2 compressor was flat from Tuesday
at C$2.42/2.47 per GJ.
At the Sumas/Huntingdon and Kingsgate export points, prices were up
two cents on the day to US$1.74/1.79 per million British thermal
units.
To the east, prices at Emerson rose about ten cents to US$1.97/2.02
per mmBtu, while Niagara was quoted at US$2.37/2.42 per mmBtu, up nine
cents from Tuesday trade.
Canadian spot natural gas export prices - Nov 4
EXPORT (NOV SWING) $CDN/GJ $US/MMBTU
HUNTINGDON B.C. 2.47/2.54 1.74/1.79
KINGSGATE B.C. (TO PNW) 2.47/2.54 1.74/1.79
MONCHY SASK 2.48/2.55 N 1.75/1.80 N
EMERSON MAN 2.79/2.86 1.97/2.02
NIAGARA ONT 3.36/3.43 2.37/2.42
Canada/U.S. dollar conversion based on Bank of Canada rate.
Canadian spot natural gas domestic prices - November 4
DOMESTIC (NOV SWING) $CDN/GJ $US/MMBTU
ALBERTA PLANT-GATE 2.26/2.31 1.59/1.63
ALBERTA BORDER - EMPRESS 2.49/2.54 1.76/1.79
STATION 2, B.C. 2.42/2.47 1.71/1.74
SASK. PLANT-GATE 2.26/2.31 1.59/1.63
TORONTO CITY-GATE 3.34/3.42 2.36/2.41
1-YR PCKGS - EMPRESS 2.70/2.75 1.91/1.94
AECO 2.38/2.43 1.68/1.71
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.
Morning Update
N.Y. NATURAL GAS FUTURES CALLED FIRMER ON COLDER TEMPERATURES
New York-Nov. 5-FWN--THE NATURAL GAS FUTURES ARE CALLED to open steady
to up 3 cents this morning. In over-the-counter trading this morning,
December natural gas futures are bid at $2.410 and offered at $2.420
compared to a 4.1- cent loss to close at $2.395 on Wednesday.
The key, according to some floor brokers, is whether the market can
make the early calls. "I doubt we make the calls and would not be
surprised by a quick downside test of the $2.350 level," one broker
said.
However, another trader said there will be strong support on any early
weakness that could set up a quick run at the $2.530 key resistance
area for December futures.
December fell short of fully testing Tuesday's session high at $2.46
and that left futures prices struggling for direction late Wednesday,
ahead of the weekly U.S. gas storage report.
The market appears to have factored into prices a bearish American Gas
Association (AGA) stocks report, traders said. December futures moved
up a few pennies in ACCESS trading after breaking below Tuesday's low
and hitting a electronic-session low of $2.367 last night.
Some traders were surprised by the recovery in prices Wednesday
afternoon despite AGA reporting a 48 bcf rise gas stocks.
Traders were talking about a build of 20 to 45 bcf in the weekly
inventory report. A year ago there was a withdrawal of 5 bcf. Over the
last four years the average has been a build of 7 bcf.
Total stocks of gas in storage is 3,094 bcf. That's only 5 bcf below
the record levels hit in 1994 injection season and nearly 200 bcf
above the 4-year average, one broker noted.
He said the stocks situation is old news and now the focus is on the
weather. But he said a positive reaction to the AGA data would improve
the overall chart complexion.
He said the three-month strip continues to look more positive with
only the December contract holding back a more positive outlook.
"Consumers need protection for January and February," he advised. He
noted that a lot of people continue to talk about a cold winter coming
later than usual this season. That could allow some warmer-than-normal
temperatures to develop later this month and in December.
But the focus this morning is on the 6- to 10-day National Weather
Service (NWS) outlook released last night. The NWS said most of the
nation will be under the influence of below-normal temperatures during
the Nov. 10-14 period. Adding to the colder outlook will be increased
chances for above-normal precipitation for much of the nation.
Technical support for December natural gas futures is seen at $2.350,
$2.290, $2.230, $2.18 and $2.100 with resistance seen at $2.460,
$2.490, $2.530 and $2.630.
Overnight trading on ACCESS in natural gas futures witnessed December
futures trading between $2.435 to $2.367 and was last up 1.8 cents at
$2.413.
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