News that newly upgraded Hurricane Wilma was now expected to shift course eastward toward lower Florida after entering the Gulf of Mexico (GOM), instead of menacing the offshore production area as believed the day before, had reached cash traders by the time they got down to business Tuesday morning. So they ignored Monday's screen spike of nearly 70 cents, and instead sent prices lower at all points Tuesday.
Losses ranged from less than a dime to nearly 70 cents, with nearly all in double digits. The Rockies tended to see most of the smallest declines, while the largest ones were concentrated in the Gulf Coast and Northeast.
Traders crossed their fingers in hopes that avoiding yet another disruption of GOM supplies in what has been a devastating 2005 Atlantic hurricane season would not turn out to be a mirage. But as of Tuesday, the National Hurricane Center's (NHC) "five-day cone" of projected storm direction showed Wilma moving northward just off the western end of Cuba early Friday and then making a sharp northeastward turn that would take it across the southern end of Florida.
Hurricane watches had been issued for western Cuba and Mexico's Yucatan Peninsula as Wilma approached. At 5 p.m. EDT Tuesday the storm's center was about 180 miles south of Grand Cayman and moving to the west-northwest at nearly 8 mph. Maximum sustained winds were near 80 mph, making Wilma a Category One hurricane. Further strengthening was expected to take Wilma to major hurricane status (Category Three or higher) in the next day or two, NHC said.
With hurricane fears somewhat assuaged by the new hurricane forecast, the market turned its attention to more fundamental weather influences and found them lacking. The temperature outlook continued to range from mild to cool in most areas, meaning little of either cooling or heating load in the short term. And prior-day screen support had vanished. Nymex traders also used the revised Wilma projections to send all of the energy futures complex reeling Tuesday, with November natural gas diving by 46.6 cents.
Minerals Management Service (MMS) reported another moderate recovery for previously shut-in GOM production, saying outages had fallen to 5,345.66 MMcf/d Tuesday. That represented a decline of 152.30 MMcf/d from the previous day. MMS said 216 platforms and two mobile drilling rigs remained evacuated. Oil shut-ins still totaled 982,011 MMcf/d, it added. Cumulative deferred gas flows since Aug. 26, prior to Hurricane Katrina's strike, rose to 310.837 Bcf, or 8.516% of normal annual GOM output of about 3.65 Tcf, MMS said.
Louisiana production appears to have plateaued at a little under 5 Bcf/d over the past few days, according to analysis of pipeline bulletin board nominations by Bentek Energy. An increase of throughput on Southern Natural Gas that it had noted Monday actually got cut back Tuesday, Bentek said. Southern nominations from offshore and onshore Louisiana fell to 88 MMcf/d Tuesday, down from 152 MMcf/d Wednesday, it added. Cumulative production loss increased to 327.4 Bcf, according to Bentek (its total is larger than that of MMS because Bentek counts some onshore gas).
Sixteen processing plants in Louisiana and Texas, with capacities equal to or greater than 100 MMcf/d, are not active as of late Monday the Energy Department said. The number increased from last week due to unplanned maintenance at one of the facilities. The inactive plants have an aggregate capacity of 9.71 Bcf/d, and they had a total pre-hurricane flow volume of 5.45 Bcf/d.
An eight-day shut-in of Questar's Clay Basin storage facility was scheduled to end Wednesday, giving Rockies supplies an extra outlet in Tuesday's trading. But looming bearish influences for western gas markets included the return of Units #2 and #3 at the Palo Verde Nuclear Generating Plant in Arizona and PG&E's continuing to experience linepack around its maximum target levels, although the utility had not issued an OFO as of Tuesday. The two Palo Verde units began to ramp up output Monday night and should be up to maximum levels of more than 2,400 MW by Friday; Unit #1 will remain down for refueling into December (see story in Power Market Today).
A Gulf Coast producer said he was sure there will be some precautionary shut-ins in the eastern GOM even with Wilma now expected to go to Florida instead. But he noted that the area most likely be affected by new shut-ins already has a lot of production still offline as a residual effect of Katrina.
"The five [forecast] models I'm looking at" all had Wilma's most likely strike zone ranging from west of Lake Okeechobee in Florida to the state's southern tip, the producer said. Of course, storm paths can always change, he cautioned. He noted the example of how on the Wednesday evening preceding Rita's strike, that hurricane was still projected to hit land around the northern end of Matagorda Bay in Texas. Such a location would have been devastating to the Houston area and prompted those now-infamous evacuation traffic jams. But Rita's eventual landfall shifted well over 100 miles eastward to the Texas-Louisiana border, he noted.
Barring any shift of Wilma's path back toward the production area, the producer expected the market to stay soft through the rest of this week. There's very little weather-related demand, shut-in production continues to recover and Gulf Coast pipelines are continuing to allow more and more meters to resume flows, he observed.
The market isn't totally devoid of heating load, despite generally moderate mid-October weather. A Calgary-based producer said some furnaces were getting turned on in Western Canada because temperatures are getting down to freezing at night lately. He said Calgary is forecast to have a high of 3 degrees Celsius Thursday (about 36 F.) It's a fairly quiet market currently, the producer continued. Spreads for transport on Westcoast's T-South System (Station 2 to Sumas) are comfortably covered by a couple of cents, he said. He noted that Westcoast Station 2 was still trading about C35 cents behind Aeco because the intra-Alberta supply has better access to higher-demand markets in Eastern Canada and the U.S. Midwest and Northeast.
A marketer said her company continues to shun the daily market for the most part lately, saying it could afford to wait it out until high prices come down. The weather has turned cooler in the Upper Midwest, with daytime highs currently in the 60s and due to fall into the 50s late this week, but it still was not cold enough for appreciable heating load.
Enercast analyst Agbeli Ameko predicted an injection of 57 Bcf for the upcoming storage report. Meanwhile, Citigroup's Kyle Cooper said his final estimation is for a build of 62-72 Bcf.
©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
News that newly upgraded Hurricane Wilma was now expected to shift course eastward toward lower Florida after entering the Gulf of Mexico (GOM), instead of menacing the offshore production area as believed the day before, had reached cash traders by the time they got down to business Tuesday morning. So they ignored Monday's screen spike of nearly 70 cents, and instead sent prices lower at all points Tuesday.
Losses ranged from less than a dime to nearly 70 cents, with nearly all in double digits. The Rockies tended to see most of the smallest declines, while the largest ones were concentrated in the Gulf Coast and Northeast.
Traders crossed their fingers in hopes that avoiding yet another disruption of GOM supplies in what has been a devastating 2005 Atlantic hurricane season would not turn out to be a mirage. But as of Tuesday, the National Hurricane Center's (NHC) "five-day cone" of projected storm direction showed Wilma moving northward just off the western end of Cuba early Friday and then making a sharp northeastward turn that would take it across the southern end of Florida.
Hurricane watches had been issued for western Cuba and Mexico's Yucatan Peninsula as Wilma approached. At 5 p.m. EDT Tuesday the storm's center was about 180 miles south of Grand Cayman and moving to the west-northwest at nearly 8 mph. Maximum sustained winds were near 80 mph, making Wilma a Category One hurricane. Further strengthening was expected to take Wilma to major hurricane status (Category Three or higher) in the next day or two, NHC said.
With hurricane fears somewhat assuaged by the new hurricane forecast, the market turned its attention to more fundamental weather influences and found them lacking. The temperature outlook continued to range from mild to cool in most areas, meaning little of either cooling or heating load in the short term. And prior-day screen support had vanished. Nymex traders also used the revised Wilma projections to send all of the energy futures complex reeling Tuesday, with November natural gas diving by 46.6 cents.
Minerals Management Service (MMS) reported another moderate recovery for previously shut-in GOM production, saying outages had fallen to 5,345.66 MMcf/d Tuesday. That represented a decline of 152.30 MMcf/d from the previous day. MMS said 216 platforms and two mobile drilling rigs remained evacuated. Oil shut-ins still totaled 982,011 MMcf/d, it added. Cumulative deferred gas flows since Aug. 26, prior to Hurricane Katrina's strike, rose to 310.837 Bcf, or 8.516% of normal annual GOM output of about 3.65 Tcf, MMS said.
Louisiana production appears to have plateaued at a little under 5 Bcf/d over the past few days, according to analysis of pipeline bulletin board nominations by Bentek Energy. An increase of throughput on Southern Natural Gas that it had noted Monday actually got cut back Tuesday, Bentek said. Southern nominations from offshore and onshore Louisiana fell to 88 MMcf/d Tuesday, down from 152 MMcf/d Wednesday, it added. Cumulative production loss increased to 327.4 Bcf, according to Bentek (its total is larger than that of MMS because Bentek counts some onshore gas).
Sixteen processing plants in Louisiana and Texas, with capacities equal to or greater than 100 MMcf/d, are not active as of late Monday the Energy Department said. The number increased from last week due to unplanned maintenance at one of the facilities. The inactive plants have an aggregate capacity of 9.71 Bcf/d, and they had a total pre-hurricane flow volume of 5.45 Bcf/d.
An eight-day shut-in of Questar's Clay Basin storage facility was scheduled to end Wednesday, giving Rockies supplies an extra outlet in Tuesday's trading. But looming bearish influences for western gas markets included the return of Units #2 and #3 at the Palo Verde Nuclear Generating Plant in Arizona and PG&E's continuing to experience linepack around its maximum target levels, although the utility had not issued an OFO as of Tuesday. The two Palo Verde units began to ramp up output Monday night and should be up to maximum levels of more than 2,400 MW by Friday; Unit #1 will remain down for refueling into December (see story in Power Market Today).
A Gulf Coast producer said he was sure there will be some precautionary shut-ins in the eastern GOM even with Wilma now expected to go to Florida instead. But he noted that the area most likely be affected by new shut-ins already has a lot of production still offline as a residual effect of Katrina.
"The five [forecast] models I'm looking at" all had Wilma's most likely strike zone ranging from west of Lake Okeechobee in Florida to the state's southern tip, the producer said. Of course, storm paths can always change, he cautioned. He noted the example of how on the Wednesday evening preceding Rita's strike, that hurricane was still projected to hit land around the northern end of Matagorda Bay in Texas. Such a location would have been devastating to the Houston area and prompted those now-infamous evacuation traffic jams. But Rita's eventual landfall shifted well over 100 miles eastward to the Texas-Louisiana border, he noted.
Barring any shift of Wilma's path back toward the production area, the producer expected the market to stay soft through the rest of this week. There's very little weather-related demand, shut-in production continues to recover and Gulf Coast pipelines are continuing to allow more and more meters to resume flows, he observed.
The market isn't totally devoid of heating load, despite generally moderate mid-October weather. A Calgary-based producer said some furnaces were getting turned on in Western Canada because temperatures are getting down to freezing at night lately. He said Calgary is forecast to have a high of 3 degrees Celsius Thursday (about 36 F.) It's a fairly quiet market currently, the producer continued. Spreads for transport on Westcoast's T-South System (Station 2 to Sumas) are comfortably covered by a couple of cents, he said. He noted that Westcoast Station 2 was still trading about C35 cents behind Aeco because the intra-Alberta supply has better access to higher-demand markets in Eastern Canada and the U.S. Midwest and Northeast.
A marketer said her company continues to shun the daily market for the most part lately, saying it could afford to wait it out until high prices come down. The weather has turned cooler in the Upper Midwest, with daytime highs currently in the 60s and due to fall into the 50s late this week, but it still was not cold enough for appreciable heating load.
Enercast analyst Agbeli Ameko predicted an injection of 57 Bcf for the upcoming storage report. Meanwhile, Citigroup's Kyle Cooper said his final estimation is for a build of 62-72 Bcf.
©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
