NATURAL GAS PRICING & RELATED / North American In Scope
NYMEX natural gas ends with weather, technical gains
NEW YORK, Nov 5 - NYMEX Hub natural gas futures ended higher across
the board Thursday in active trade, with front months up sharply on
improved technicals and firmer cash prices in the face of some colder
weather this week, sources said.
December rallied 15.8 cents to close at $2.553 per million British
thermal units after trading between $2.367 and $2.58. January settled
12.7 cents higher at $2.665. Other deferreds ended up by 1.5 to 10
cents.
''Some of it (the rally) is weather, but it's not that cold. People
are panicking on the first cold wave of the season,'' said one Midwest
trader.
Despite the initial selloff after Wednesday's bearish weekly inventory
report, traders said improved technicals and cold forecasts could
underpin physical and paper markets near-term, particularly if the
bulk of utilities continue to meet unexpected demand from cash and not
storage.
AGA data released late Wednesday showed an unexpectedly-high 48 bcf
weekly gas stock build, well above Reuter poll estimates in the 30-40
bcf range. Overall storage jumped to 286 bcf, or 10 percent, above a
year ago.
WSC expects Northeast and Mid-Atlantic temperatures to remain two to
eight degrees F below normal through Monday. In the Southeast and
Florida, readings Thursday and Friday should be three to eight degrees
below normal, then moderate to about normal for the weekend and
Monday.
In the Midwest, much below normal readings Thursday and Friday will
warm to normal levels by Monday. Texas will dip to six to 12 degrees
below normal today, then gradually climb to near normal by Monday. The
Southwest will stay mostly below normal for the period.
Chart traders said December's close today above its 40-day moving
average in the $2.49 area and above resistance at $2.52 should set up
a test of last week's high of $2.63. Major selling was expected at the
autumn highs at $2.715-2.719.
Support was pegged first in the mid-$2.30s, then at Monday's $2.24 low
and at the September 2 low of $2.14.
In the cash Thursday, Henry Hub swing quotes jumped 15 cents to the
mid-$2.20s. Midcon pipes scored similar gains to about the $2.20
level. In the West, El Paso Permian was talked on either side $2.10,
also up about 15 cents.
Swing gas at the Chicago city gate was 10-15 cents higher in the
low-to-mid $2.40s, while New York gained more than a nickel to the
mid-$2.50s.
The NYMEX 12-month Henry Hub strip jumped 5.8 cents to $2.355. NYMEX
said an estimated 88,159 Hub contracts traded today, up from
Wednesday's revised tally of 41,212.
Energy comments Closing NYMEX natural gas
11-055 16:52 EST In addition, he noted that inventory levels are near
record levels, and there has already been a lot of talk about a colder
La Nina weather phenomena. But he acknowledged that this run in prices
could carry prices above fair value before running into more concerted
selling pressure.
The market appeared to have factored into prices a bearish American
Gas Association (AGA) stocks report, traders said. December futures
started the upside move last night on ACCESS trade and the strong move
above $2.44 to $2.47 in December futures near the opening this morning
set in motion active new buying and short-covering activities.
Some traders were surprised by the recovery in prices Wednesday
afternoon despite AGA reporting a 48 bcf rise gas stocks. For many
that recovery was a tip-off to the shift in market direction.
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 the 1994 injection season and nearly 200 bcf
above the 4-year average, one broker noted.
The focus today was 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.
US spot natural gas prices extend gains on cold
NEW YORK, Nov 5 - U.S. spot natural gas prices extended earlier gains
on Thursday as an early spell of cold weather gave way to heavy buying
on both the futures and cash side, industry sources said.
''The market has adjusted itself pretty quickly for the winter. I was
a little surprised by the sharp move,'' one Texas-based trader said,
adding she anticipated a retreat on Friday ahead of the weekend.
Gas prices at Henry Hub were quoted mostly in the mid- to high-$2.20s
per mmBtu, indicating a daily gain of about 15 cents.
In the Midcontinent, swing prices were talked mostly near $2.20, with
Northern at Demarcation seen trading mostly at $2.25-2.27.
At the Chicago city-gate, prices were quoted widely at $2.35-2.51,
with most business reported done in the mid-$2.40s.
In west Texas, Permian Basin prices climbed to $2.08-2.13, while the
San Juan market hovered around $2.06-2.11 and gas on Transwestern
(East of Thoreau) sold at $2.15-2.17, sources said.
In the East, Appalachian deals were reported done in the low- to
mid-$2.50s on Columbia Gas, while New York city-gate prices wavered
between $2.50 and $2.60, sources said.
Below-normal temperatures are expected to continue throughout the U.S.
through the weekend, with lows in the 30s seen in the Midwest and
Northeast.
By next week, temperatures are forecast to remain below normal in the
western U.S., with the coldest weather concentrated in the Northwest.
Normal to above-normal levels are forecast for Texas and the eastern
half of the U.S.
Separately, AGA said U.S. gas stocks rose last week by 48 bcf to 97
percent of capacity. Overall storage jumped to 286 bcf, or 10 percent,
above a year ago.
Charts
oilworld.com
Canada natural gas prices up sharply on weather
NEW YORK, Nov 5 - Snow flurries, cold weather and an early rally on
NYMEX spurred more buying in the Canadian spot natural gas market on
Thursday, industry sources said.
Linepack on NOVA's system in Alberta surpassed the pipeline's target
at 13.17 billion cubic feet per day (bcf) as of Wednesday night, but
the arrival of snow triggered drafting, sources said.
Prices at Alberta's AECO storage hub surged to C$2.70-2.80 per
gigajoule (GJ), up about 32 cents from Wednesday's market.
Similarly at Station 2, B.C., prices mirrored Alberta values in the
low-C$2.70s.
At the Sumas/Huntingdon export point, prices tacked on 14 cents to
trade widely at US$1.80-1.95 per million British thermal units
(mmBtu).
The cold weather now in the Northwest is forecast to continue through
at least next week, according to Weather Services Corp.
Further east, prices at Emerson jumped about 15 cents to about
US$2.12-2.15 per mmBtu, while Niagara was quoted at US$2.45-2.50 per
mmBtu, up another eight cents from Wednesday.
NYMEX's December contract soared to a high of $2.575, up 18 cents from
the previous settlement.
Canadian spot natural gas export prices - November 5th
EXPORT (NOV SWING) $CDN/GJ $US/MMBTU
HUNTINGDON B.C. 2.65/2.72 1.88/1.93
KINGSGATE B.C. (TO PNW) 2.75/2.82 1.95/2.00
MONCHY SASK 2.64/2.71 N 1.87/1.92 N
EMERSON MAN 2.99/3.06 2.12/2.17
NIAGARA ONT 3.46/3.53 2.45/2.50
Canada/U.S. dollar conversion based on Bank of Canada rate.
Canadian spot natural gas domestic prices - November 5th
DOMESTIC (NOV SWING) $CDN/GJ $US/MMBTU
ALBERTA PLANT-GATE 2.58/2.63 1.83/1.86
ALBERTA BORDER - EMPRESS 2.80/2.85 1.98/2.02
STATION 2, B.C. 2.69/2.74 1.91/1.94
SASK. PLANT-GATE 2.58/2.63 1.83/1.86
TORONTO CITY-GATE 3.39/3.46 2.40/2.45
1-YR PCKGS - EMPRESS 2.75/2.80 1.95/1.98
AECO 2.70/2.75 1.91/1.95
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.
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