SUNDAY REVIEW / Korner's Review Of Canadian Markets & O&G Related (4)
NATURAL GAS
WSC-Canadian Energy Weather
As of 07:35 GMT, 08 JAN 1999
SUMMARY- Temperatures ranged from near normal in the far eastern
areas to 4-8F (2-4C) below normal over the west.
IMPACT- A shot of mild air will drop heating demand to below normal
during the next 48 hours but especially on Saturday. This will not
last as cold air returns early to mid next week with higher heating
demand once again across the region.
FORECAST-
48 HOUR...Temperatures 2-4F (1-2C) below normal today, warming to 5-
10F (3-5C) above normal Saturday.
3 TO 5 DAY...Temperatures 1-3F (1-2C) above normal Sunday dropping to
4-10F (2-5C) below normal Monday and Tuesday.
6 TO 10 DAY...Temperatures which will remain below normal for the
first couple of days of the period will likely warm to near to above
normal by the end of the period.
U.S. Snows Send Canadian Geese South
Midwesterners digging out from a near-record snow storm saw something
in the skies this week not seen in five years -- Canada geese, wave
after honking wave, winging south.
''That's all people have been talking about this week is all the
geese they've been seeing. It's so unusual for this time of year.
During the fall we didn't see many geese at all. But, now they're
everywhere,'' said Roger Bruton of Frankfort, Indiana, a rural town
about 30 miles north of Indianapolis.
Canada geese that normally fly to southern Illinois and western
Kentucky for the last five winters have only flown as far south as
southern Wisconsin or northern Illinois because of mild weather, said
Ray Marshalla, Illinois waterfowl biologist.
But 2 feet of snow and sub-zero degree temperatures got the geese
going this year.
''They're not imprinted on southern Illinois like they used to be so
in order to get them to move down there they need much more severe
weather than normal to get them to migrate. It's not something
they're used to doing,'' Marshalla said.
Canada Spot Natural Gas Firms In Alberta, Softens At Exports
NEW YORK, Jan 8 - Canadian domestic spot natural gas prices recovered
slightly on Friday despite a warming trend over southern Alberta,
traders said.
Spot gas at the AECO storage hub in Alberta was quoted at C$2.30-2.31
per gigajoule (GJ), recovering about four cents from Thursday.
The forwards remained steady at C$2.34 for February and about C$2.32
for March, sources said. The summer AECO market was pegged at C$2.28
per GJ.
Lending some support to the market, sources said, was a drop in
supply in Alberta.
Linepack on NOVA's system as of Thursday night was down 185 million
cubic feet per day at 13.268 billion cubic feet per day (bcfd), which
was just below the pipeline's target at 13.3 bcfd.
Canadian Gas Association (CGA) reported a seven percent drop in gas
stocks over the last two weeks to 427 bcf, or 82 percent full,
compared with 68.6 percent of capacity in 1998.
Also as of Jan 1, CGA said western storage inventories were at 218
bcf, or 78.6 percent full, versus 67.7 percent a year ago.
Temperatures in southern Alberta are expected to reach a high of -4
degrees C on Saturday and then +2 degrees by Monday.
In the export market, prices at Sumas, Wash. were quoted early as
high as US$1.77 per mmBtu and late in the US$1.60s per mmBtu,
indicating an average loss of seven cents from Thursday.
01/08 13:38 U.S. Spot Natural Gas Prices Steady To Higher With
Futures
NEW YORK, Jan 8 - U.S. spot natural gas prices were on a gradual
climb Friday morning following Thursday's 10-20 cent decline as
revised forecasts showed cold and snowy weather continuing for a few
more days, industry sources said. Swing prices at Henry Hub were
quoted at $1.86-1.92 per mmBtu, with most business reported done
around $1.90.
In the Midcontinent, weekend prices on Panhandle, NGPL and ANR were
also fairly firm at $1.83-1.88, though deals were also confirmed done
outside this range. Northern at Demarcation was quoted at $1.89-2.03.
At the Chicago city-gate, prices edged up to about $2.10-2.15 today,
traders said, recovering from Thursday's low of $2.03.
However, baseload prices at the Chicago city-gate remained deflated
around $2, marketers said.
In the East, Appalachian prices on Columbia Gas were similarly firm
at $1.96-1.97 early and the low-$2 area by late morning.
Baseload gas prices on TCO were talked at $1.96.
In west Texas, both Permian and San Juan prices were steady to softer
in the mid- to high-$1.70s, while southern California border prices
were assessed at $1.88-1.95 as demand waned ahead of the weekend.
Revised weather forecasts now point to a possible delay in the
arrival of mild weather, and current conditions show ice and snow in
the Midwest, with another round of cold, snowy weather forecast for
the weekend.
Wednesday's forecast showed above- to much-above-normal temperatures
across the U.S. starting Tuesday, but temperatures in New York on
Tuesday are now forecasted to only hit a high of 23 degrees,
according to Weather Services Corp. (WSC).
Chicago's temperature highs are expected to be 15 degrees on Monday,
22 on Tuesday and 25 on Wednesday, with the milder now expected to
surface later next week.
NYMEX Natural Gas Ends Lower After Paring Gains Late
NEW YORK, Jan 8 - NYMEX February Hub natural gas futures finished
slightly lower Friday after traders pared gains shortly before the
close, industry sources said.
February settled 0.6 cent lower at $1.83 per mmBtu after bouncing off
the $1.81 low to a high of $1.875 this afternoon. March similarly
finished down 0.7 cent at $1.849. Other deferred months were on
either side of unchanged.
The cold weather is now expected to remain in most of the Midwest for
at least another six days, Weather Services Corp. (WSC) reported,
equating to highs in the 20s and teens across most of the upper
Midwest and Northeast.
In the Chicago area, temperatures are expected to be three to six
degrees below normal Monday and Tuesday, while much of the Northeast
is forecast to see three to eight degree below-normal temperatures
for the same period.
Early withdrawal estimates for next Wednesday's American Gas
Association storage report range anywhere from 90 bcf to 500 bcf.
This will be compared with a draw of only 50 bcf a year ago.
Technically, February support was still seen at the contract low of
$1.77, and then at $1.61. Resistance was pegged at Thursday's high of
$1.915, which converges with the high on December 24. The next
resistance levels were $1.96, $2.02, $2.085 and the $2.14-2.17 gap.
In Friday's cash market, prices at Henry Hub finished around $1.90,
while Midcontinent cash was assessed mostly in the mid-$1.80s.
Chicago traded at $2.10-2.15 for swing and about $2 for baseload,
sources said, while New York was quoted widely at $2.80-$3.40.
--------------------------NATURAL GAS-------------------------
NYM - 10,000 mm british thermal units.
CONTRACT
OPEN HIGH LOW SETTLE CHANGE HIGH LOW
Feb 99 1.835 1.875 1.810 1.830 -.006 2.770 1.770
Mar 99 1.855 1.890 1.835 1.849 -.007 2.600 1.790
Apr 99 1.850 1.880 1.830 1.847 0 2.440 1.790
May 99 1.860 1.890 1.850 1.863 -.002 2.380 1.820
Jun 99 1.870 1.905 1.870 1.884 -.001 2.380 1.855
Jul 99 1.905 1.920 1.885 1.905 0 2.390 1.875
Aug 99 1.915 1.945 1.910 1.929 +.001 2.390 1.910
Sep 99 1.945 1.965 1.935 1.953 +.003 2.380 1.935
Oct 99 1.990 2.000 1.975 1.995 +.005 2.415 1.970
Nov 99 2.125 2.140 2.120 2.130 +.005 2.535 2.115
Dec 99 2.290 2.300 2.275 2.280 -.010 2.680 2.213
Jan 00 2.360 2.360 2.325 2.330 -.020 2.655 2.320
Feb 00 2.270 2.275 2.255 2.257 -.018 2.545 2.255
Mar 00 2.205 2.205 2.160 2.160 -.020 2.426 2.160
Apr 00 2.100 2.105 2.081 2.081 -.014 2.320 2.081
May 00 2.090 2.090 2.057 2.057 -.013 2.300 2.057
Jun 00 2.085 2.090 2.068 2.068 -.012 2.308 2.068
Jul 00 2.098 2.100 2.083 2.083 -.010 2.320 2.083
Nov 00 2.245 2.245 2.243 2.243 0 2.469 2.048
Dec 00 2.390 2.390 2.390 2.390 0 2.615 0.244
Jan 01 2.420 2.430 2.420 2.420 0 2.613 2.420
Feb 01 2.305 2.310 2.305 2.305 0 2.505 2.305
Jul 01 2.105 2.105 2.095 2.095 +.001 2.291 2.095
Nov 01 2.275 2.275 2.271 2.271 0 2.379 2.271
Dec 01 2.415 2.415 2.410 2.410 0 2.500 2.410
Jan 02 2.450 2.460 2.450 2.450 0 2.494 2.450
Est. Sales 59789
Estimated US Natural Gas In Storage To Rise In First Quarter
WASHINGTON, Jan 8 - U.S. natural gas in underground storage at the
end of the first quarter of 1999 will rise to 5.91 trillion cubic
feet, up from a previous estimate of 5.53 tcf, the U.S. Energy
Information Administration said Friday.
Withdrawals of gas from storage during the quarter will be less than
previously thought, the EIA said in its monthly analysis of the short-
term outlook for energy demand.
Net withdrawals were estimated at 1.26 tcf, compared to the EIA's
earlier estimate of 1.39 tcf.
The agency also adjusted its estimate of gas demand by industrial
customers to 2.22 tcf, from a previous estimate of 2.27 tcf.
U.S. electricity demand will rise in the first quarter, especially
among residential and commercial buyers, the EIA said.
''The industrial sales growth rate is likely to tail off through the
next year,'' the EIA said in its report. ''For 1999, projected growth
in demand is 1.6 percent over 1998 levels, reflecting expected
comparative weakness in summer cooling demand and a general slowing
in the economy.''
Canadian Spot Natural Gas Export Prices - Jan 8th
EXPORT (JAN SWING) $CDN/GJ $US/MMBTU
HUNTINGDON B.C. 2.36/2.43 1.68/1.73
KINGSGATE B.C. (TO PNW) 2.30/2.37 1.64/1.69
MONCHY SASK 2.36/2.43 N 1.68/1.73 N
EMERSON MAN 2.56/2.63 1.82/1.87
NIAGARA ONT 2.74/2.81 1.95/2.00
Canada/U.S. dollar conversion based on Bank of Canada rate.
N equals Notional
Canadian Spot NatGas Domestic Prices - Jan 8th
DOMESTIC (JAN SWING) $CDN/GJ $US/MMBTU
ALBERTA PLANT-GATE 2.16/2.21 1.54/1.57
ALBERTA BORDER - EMPRESS 2.31/2.36 1.64/1.68
STATION 2, B.C. 2.33/2.38 1.65/1.69
SASK. PLANT-GATE 2.16/2.21 1.54/1.57
TORONTO CITY-GATE 2.71/2.78 N 1.93/1.98 N
1-YR PCKGS - EMPRESS 2.64/2.69 1.88/1.92
AECO 2.28/2.33 1.62/1.65
N=notional. One yr package beginning Nov. 1, 1999.
Canada/U.S. dollar conversion based on Bank of Canada noon rate.
One year packages converted to U.S. dollars at a 12-month forward
rate.
Canadian Gas Association Storage Survey - Dec 25, Jan 1
TORONTO, Jan 8 - Canadian Gas Association (CGA) weekly survey of
Canadian natural gas in storage in billion cubic feet (bcf) for the
weeks ended Dec 25 and Jan 1:
Pct Full Pct Full
01/01/99 12/25/98 Pct Full Week Ago Year Ago
East 209.00 224.15 86.0 92.2 69.7
West 218.24 235.46 78.6 84.8 67.7
Total Canada 427.24 459.61 82.1 88.3 68.6
East-West division is the Manitoba/Saskatchewan and North
Dakota/Minnesota borders.
East capacity 01/01/99: 243.06 bcf, 12/25/98: 243.06 bcf.
West capacity 01/01/99 277.62 bcf, 12/25/98: 276.02 bcf.
The Canadian Gas Association survey includes liquefied petroleum gas,
Canadian operators of gas storage and Canadian companies contracting
gas storage in the U.S.
The survey does not include statistics from the 25 bcf Sabine Storage
Facility in Alberta.
U.S. Spot Natural Gas Prices - January 8th
JANUARY ($/mmBtu) 1/8 1/7
U.S. GULF OFFSHORE 1.76/1.81 1.77/1.82
TEXAS COAST 1.78/1.83 1.79/1.84
WESTERN TEXAS 1.74/1.79 1.75/1.80
LOUISIANA COAST 1.83/1.88 1.84/1.89
NORTHERN LOUISIANA 1.85/1.90 1.86/1.91
OKLAHOMA 1.83/1.88 1.80/1.85
APPALACHIA 1.94/1.99 1.94/1.99
SO. CALIFORNIA BORDER 1.88/1.93 1.90/1.95
HENRY HUB 1.88/1.92 1.88/1.93
WAHA HUB 1.76/1.81 1.79/1.84
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Chart References
NYMEX HENRY-Hub NATURAL GAS PRICE CHARTS
oilworld.com WEST Tx WAHA-Hub
NATURAL GAS PRICE CHARTS
oilworld.com
OIL INDUSTRY COMBINED GRAPH CHARTS
oilworld.com
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