Thursday, 30 June 2011
Canadian Natural Gas Rises on Tighter Supply and Warm U.S. West
Canadian natural gas for rose for a second day on tighter supplies and forecasts of higher cooling demand in the U.S. West that would spur the need for the fuel to power air-conditioners.
Alberta gas for August delivery increased 0.25 cent to C$3.57 per gigajoule ($3.55 per million British thermal units) as of 3:10 p.m. New York time, according to NGX, a Canadian Internet market. July gas fell 1 cent to C$3.58. Gas traded on the exchange goes to users in Canada and the U.S. and is priced on TransCanada Corp.’s Alberta system.
Natural gas for August delivery on the New York Mercantile Exchange gained 5.9 cents to settle at $4.374 per million Btu.
“It’s probably a little bit tighter supply in the province at the moment because of field maintenance, and maybe there’s a little bit of fiscal short covering by traders, going into our long weekend,” Martin King, an analyst at FirstEnergy Capital Corp. in Calgary, said in a telephone interview.
Cooling demand in Los Angeles will be 48 percent above normal until at least July 7, according to Belton, Missouri- based forecaster Weather Derivatives. Power plants use 30 percent of U.S. gas supplies, according to the Energy Department.
Much of the West will have above-normal temperatures from July 4 to July 8, MDA EarthSat Weather of Gaithersburg, Maryland, said in a forecast to clients.
California Temperatures
The high in Los Angeles on July 4 may reach 88 degrees Fahrenheit (31 Celsius), 5 above normal, according to AccuWeather Inc. of State College, Pennsylvania.
Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 15.64 billion cubic feet as of 3 p.m. in New York.
Gas was flowing at a daily rate of 2.8 billion cubic feet at Empress, Alberta, where the fuel is transferred to TransCanada’s main line.
At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 1.94 billion cubic feet.
Available capacity on TransCanada’s British Columbia system at Kingsgate was 1.09 billion cubic feet. The system was forecast to carry 1.82 billion cubic feet today, about 63 percent of its capacity of 2.9 billion.
Gas at the Alliance Pipeline delivery point near Chicago fell 14.44 cents, or 3.2 percent, to $4.3347 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry 1.5 billion cubic feet a day to the Midwest from western Canada.
At the Kingsgate point on the border of Idaho and British Columbia, gas fell 11.89 cents, or 2.8 percent, to $4.0972.
China Natural Gas gets buyout offer; shares jump
* Deal values co at $91.2 mln
* Each shareholder to get $4.25
* Shares up as much as 13 pct (Adds share movement, background)
June 30 (Reuters) - China Natural Gas Inc said a group backed by Themes Investment Partners will take it private, in a deal valuing the distributor of compressed natural gas at $91.2 million, sending its shares up as much as 13 percent.
Each shareholder of the Chinese company will get $4.25 per share in cash, a 23 percent premium over the company's Wednesday's close onNasdaq, China Natural Gas Chief Executive Qinan Ji said in a statement.
Themes Investment Partners is a China-focused private equity firm.
Shares of the company, were up more than 6 percent at $3.68 on Thursday. They had been halted earlier in the session. The stock has lost about 37 percent in the last six months.
China Natural Gas, which appointed a new chief financial officer in December, has a market capitalisation of $74.2 million and long-term debt of $42.6 million, according to Reuters data.
The company, which provides natural gas for industrial, commercial and residential use, claims to own and operates a 120-kilometer-long compressed gas pipeline in Xi'an, China.
(Reporting byVaishnavi Bala in Bangalore; Editing by Joyjeet Das)
Source: http://www.reuters.com/article/2011/06/30/chinanaturalgas-idUSL3E7HU34T20110630U.S. Natural Gas Shipments Fall on Lower Cooling Demand in West
Scheduled natural gas deliveries to U.S. electricity generators fell for the first time in four days on forecasts of lower cooling demand in the West, decreasing the need for fuel to power air-conditioners.
A sample of scheduled deliveries to power plants in the U.S. and Canada shows shipments fell 8.7 percent to 18.3 million dekatherms (17.9 billion cubic feet), according to data compiled by Bloomberg. Shipments to power generators in California dropped 20 percent.
Cooling demand in San Francisco will be non-existent and 3 percent of normal in Seattle until at least July 6, said Belton, Missouri-based forecaster Weather Derivatives. Power plants use 30 percent of U.S. gas supplies, according to the Energy Department.
Much of the West will have normal temperatures until July 3, and Midwestern temperatures will cool to normal from above- normal July 4-8, MDA EarthSat Weather of Gaithersburg, Maryland, said in a note to clients.
The high in Los Angeles today may reach 76 degrees Fahrenheit (24 Celsius), 6 below normal, according to AccuWeather Inc. of State College, Pennsylvania.
Scheduled gas shipments for U.S. residences fell 4.5 percent to 22.9 million dekatherms after a 14 percent drop yesterday.
Wholesale gas at the SoCal Border hub, where gas is delivered to the Southern California Gas Co., gained 2.03 cents, or 0.5 percent, to $4.4378 per million British thermal units yesterday on the Intercontinental Exchange.
Gas at the Henry Hub in Erath, Louisiana, the delivery point for futures traded on the New York Mercantile Exchange, gained 9.09 cents, or 2.1 percent, to $4.3411 per million Btu.
Source:
Russia's Gazprom to boost exports to Europe
MOSCOW (AP) — Russia's Gazprom state-controlled natural gas giant says it plans to boost exports to Europe this year and set a new record high in export earnings.
Gazprom CEO Alexei Miller told Thursday's annual shareholders' meeting that the company expects to export 155-158 billion cubic meters of gas to customers in Europe this year compared to last year's 139 billion.
Miller said the company will also seek to expand the sales of liquefied natural gas to China, Japan and South Korea.
Gazprom currently accounts for 15 percent of the world's natural gas output and 18 percent of globalnatural gas reserves.
Miller said that the company's reserves currently stand at 33.1 billion cubic meters of gas.
Source: http://news.yahoo.com/russias-gazprom-boost-exports-europe-075750091.html
Natural gas futures decline as weather forecasts moderate
Forexpros - Natural gas futures down for the first time in four days on Wednesday, pulling back from a one-week high on forecasts of moderating temperatures that would reduce demand for the fuel.
On the New York Mercantile Exchange, natural gas futures for August delivery traded at USD4.311 per million British thermal units during U.S. morning trade, slumping 1.2%.
It earlier fell as much as 1.8% to trade at a daily low of USD4.282 per million British thermal units. Natural gas prices rose to a one-week high of USD4.377 on Tuesday.
Earlier in the day, industry weather group MDA Federal said that it now expected mostly normal temperatures across the continental U.S. from July 5 to July 9.
The weather forecaster had previously called for "unseasonably" hot temperatures in the U.S. Great Lakes and mid-Atlantic region next week.
Meanwhile, the Commodity Weather Group said that July was likely to be warmer than previously thought, though not as hot as last summer, when above-average heat lifted demand for gas to power air conditioners to almost record levels.
In its seasonal outlook published earlier in the day, the weather group said, "Our updated July outlook in the past two weeks is still nowhere near as cool as the original expectation, but it does continue to shed cooling degree days, and it is quite a bit cooler than July 2010."
Natural gas traders monitor weather forecasts to determine whether temperatures may boost heating or cooling demand. Predictions of below-average or above-average temperatures may prompt traders to buy or sell gas futures.
Markets were looking forward to the U.S. Energy Information Administration's weekly report on U.S. natural gas stockpiles for the week ended June 24 on Thursday.
The report was expected to show that U.S. natural gas inventories increased by 80 billion cubic feet, after adding 98 billion cubic feet in the preceding week.
Elsewhere, light sweet crude oil futures for delivery in August jumped 1.6% to trade at USD94.31 a barrel, while heating oil for August delivery rallied 2.3% to trade at USD2.901 per gallon during U.S. morning trade.
Read more: http://community.nasdaq.com/News/2011-06/natural-gas-futures-decline-as-weather-forecasts-moderate.aspx?storyid=83075#ixzz1Qlq717wC
Monday, 30 May 2011
Medvedev insists Ukraine pay price agreed for Russian natural gas
Moscow - President Dmitry Medvedev on Monday rejected calls from Ukraine for a cut in the price of natural gas imported from Russia, insisting that 'signed agreements need to be respected.'
During a meeting with Gazpromchairman Aleksei Miller, Medvedev said: 'The price as it is is absolutely fair.' He stressed that gas revenues were crucial for Russia.
Ukraine has argued that falling international gas prices and soaring profits for the state-controlled gas producer should lead to a revision in the price paid by Ukraine, which is heavily dependent on Russian gas.
Miller said Gazprom could expect record income this year on the strength of a 27-per-cent rise in gas exports for the first five months of 2011, as compared with 2010.
Rising European consumption and instability in some Middle Eastern gas-producing nations were the main drivers of rising demand for Gazprom product, Miller said in comments reported by Interfax.
Gazprom's top strategic goal was increasing delivery capacity to major consumers, he said, with a Baltic Sea pipeline to Germany and a Sea of Okhotsk pipeline aimed at the Japanese market the company's highest-priority projects.
Medvedev said Gazprom's continued strong revenues were critical for the Russian government and advised Miller to discuss price cuts with Kiev only if this were beneficial for Russia.
'Any changes need to be part of a wider agreement,' he said.
Since December, Ukraine has repeatedly called for a reduction in the price paid for gas, pointing to alleged economic damage caused to Ukrainian manufacturers producing mainly for the Russian economy.
In April 2010, Ukraine negotiated a favourable rate of 234 dollars per thousand cubic metres in exchange for a 25-year lease extension for the Russian navy to use to port facilities in Ukraine's Crimean peninsula.
That price in the face of a weakening regional economy is now too high, Kiev officials have said.
Russian officials have said the price is reasonable, but that they would be willing to consider a reduction were Ukraine to agree to turn over ownership of its natural gastransportation network to Gazprom.
Gazprom is Russia's largest company. Disputes between Gazprom and Ukraine over gas pricing sparked a halt to supplies of Russian natural gas to Europe during January 2010.
Malaysia ups power, natural gas prices
PUTRAJAYA, Malaysia May 30 (Reuters) - Malaysia said on Monday it will raise electricity prices by an average 7.12 percent from June 1 in an effort to cut down on subsidies.
Officials said natural gas prices would also rise by 3.0 ringgit (about $1.0) per mmBtu each six months until it reached market levels.
Power prices would rise by as much as 2.3 sen per kilowatt hour.
The price charged by state oil company Petronas for power generation would rise to 13.7 ringgit per mmBtu from 10.7 ringgit, they said.
Source: http://af.reuters.com/article/energyOilNews/idAFKLA00255320110530
Sunday, 22 May 2011
Natural Gas Weekly Fundamental Analysis for May 23-27, 2011
Last week, natural gas prices extended their drop for a third consecutive week, where expectations of falling demand amid moderating weather conditions in Eastern and Southern of the United States, which will reduce demand for power-fuel, in addition to rising stockpiles of natural gas pressured natural gas prices to fall heavily, as the EIA report for natural gas inventories showed stockpiles rose the most since September 2010, although natural gas prices rebounded last Friday on expectations of above than normal weather conditions in Eastern of the United States.
Weather conditions over the upcoming period in addition to natural gas stockpiles will be the major movers for natural gas prices, but given the recent speculations, we should expect natural gas prices to rise back during this upcoming week, but another strong rise in natural gas inventories will surely send prices tumbling to the ground.
Highlights for this week that will probably affect the Natural Gas direction are:
Thursday, 14:30, The EIA will release the weekly natural gas storage change for the week ending May 20, where the prior report showed that natural gas inventories inclined by 92 billion cubic feet.
Natural Gas Technical Analysis for the Week of May 23, 2011
The natural gas markets had an absolutely volatile session this week, and on Friday managed to wipe out the losses suffered earlier in the week. The market in general looks very range bound, and the patient trader can make serious money as long as this range holds up. The $4 mark seems to be the floor, while the $4.60 area is the ceiling. If you are patient enough to wait for these areas to be tested, you could do quite nicely, and who knows for how long?
Natural Gas Daily Fundamental Analysis for May 23, 2011
Natural gas prices rebounded on Friday, after falling heavily on Thursday due to the EIA report for natural gas inventories, which showed the biggest rise since September 2010, where the EIA report showed natural gas inventories increased by 92 billion cubic feet.
Nonetheless, natural gas prices rebounded on Friday amid speculations of a heat wave that will hit Eastern of the United States, which led to expectations of rising demand on power fuel, and accordingly, natural gas prices rose.
Based on expectations of higher than average temperatures, we should expect natural gas prices to rise on Monday, although rising supply of natural gas in general could still weigh down on prices over the short term.
Saturday, 21 May 2011
Natural Gas Futures Gain Most in Three Weeks on Second Weekly Rig Decline
Natural gas futures advanced the most in three weeks as data showed the number of U.S. gas drilling rigs fell for a second consecutive week.
Gas gained 3.3 percent after Houston-based Baker Hughes Inc. said the rig total declined 8 to 866 this week, the lowest level since the week ended Jan. 29, 2010. Prices also rose after gas settled near a six-week low yesterday, spurring buying from traders betting that the market had hit a bottom for now.
“It’s the second drop in a row and it is what the bulls are looking for,” said Carl Neill, an energy consultant at Risk Management Inc. in Atlanta. “It seems prices are at the bottom of the range.”
Natural gas for June delivery rose 13.6 cents to settle at $4.23 per million British thermal units on the New York Mercantile Exchange, the biggest percentage gain since April 28. The futures fell 0.4 percent this week.
“The market seems to be thinking that we might have done enough this week with selling off,” said Phil Flynn, vice president of research at PFGBest in Chicago. “We’re kind of getting a dead cat bounce.”
Gas stockpiles gained 92 billion cubic feet in the week ended May 13 to 1.919 trillion cubic feet, the Energy Department said yesterday. The five-year average change for the week is an increase of 91 billion cubic feet, department data show. Inventories rose 78 billion cubic feet a year earlier.
Storage levels were down 11 percent from a year earlier, narrowing from 12 percent in the previous week, department data showed. Stockpiles were 1.8 percent below the five-year average last week compared with 2 percent the previous week.
Temperatures may be normal or above-normal across most of the continental U.S. from May 25 through May 29, according to WSI Corp. in Andover, Massachusetts. Warmer-than-normal weather is likely along the Eastern Seaboard.
Texas Weather
The high in Dallas on May 28 may be 92 degrees Fahrenheit (28 Celsius), 5 degrees above normal, according to AccuWeather Inc. in State College, Pennsylvania. The high in Chicago may be 64, 12 below normal.
Cooling demand in the south-central U.S. may be 12 percent below normal from May 26 through May 30, David Salmon, a meteorologist with Weather Derivatives in Belton, Missouri, said in a note to clients today.
Power plants use about 30 percent of the nation’s gas supplies, according to the Energy Department.
Pipeline Shipments
Natural gas shipments to U.S. power plants were set to increase for a fifth day as hotter-than-normal weather in the South boosts demand for gas-fired electricity.
A sample of scheduled gas shipments for U.S. electricity generation gained 3.6 percent to 13.5 million dekatherms (13.1 billion cubic feet) from yesterday’s 13 million, according to data compiled by Bloomberg as of 3:46 p.m. in New York.
Gas deliveries to Florida power plants advanced 6.1 percent to 2.72 million dekatherms.
Gas futures volume in electronic trading on the Nymex was 235,934 as of 2:44 p.m., compared with the three-month average of 306,000. Volume was 315,365 yesterday. Open interest was 947,797 contracts. The three-month average open interest is 945,000.
The exchange has a one-business-day delay in reporting open interest and full volume data.
Natural gas drilling informational events set
Staff Report
Three programs this week will offer information about natural gas drilling to area residents.
On Tuesday, an informational meeting about gas drilling and it's impact on our community will be held at the Worcester Women's Club Meeting Room 168 Main St. in Worcester from 7 to 9 p.m. The speakers scheduled are Dr. Ron Bishop, Lou Allstadt and Michelle Kennedy.
Chenango Community Action For Renewable Energy (C-CARE)'s series of public forums will continue at 7 p.m. Thursday at the United Church of Christ at 11 W. Main St. in Norwich. The program will give advice to property owners, leaseholders and their neighbors about issues that have come up, such as terminating a lease, force majeure and compulsory integration.
Forum presenters will be Ellen Harrison, geologist and environmental scientist from Ithaca; and founder of "Fleased," an organization providing voice to landowners, and lawyer Joseph Heath, general council for the Onondaga Nation, whose work has focused on environmental protection under the Clean Water Act and land rights.
The public is asked to park on the street, in the Hayes Street or county office building parking lots, and not in the church lot in back. For more information, call Chris at 334-6095 or e-mail Ken atccare@frontier.com.
Also Thursday, the Otsego Proactive Network will present an information session at the Westford Town Hall. The program will address the economic potential of gas development, featuring presentations by Carolyn and Aaron Price.
The Prices' company, Red Dragon Inc., produced the 2010 documentary film "Gas Odyssey."
Source: http://thedailystar.com/localnews/x57646434/Natural-gas-drilling-informational-events-set
Natural Gas Bounce Back From Six-Week Lows
HOUSTON—Natural-gas futures erased Thursday's sharp losses, rising more than 3% as buyers re-entered a market at prices that had fallen to their lowest level in almost six weeks.
Natural gas for June delivery settled up 13.6 cents, or 3.3%, at $4.23 a million British thermal units on the New York Mercantile Exchange.
The benchmark contract shed 10.4 cents Thursday after the Energy Information Administration reported the largest injection of gas into U.S. storage so far this year, narrowing the deficit between current and typical storage levels for the first time in two months.
That stoked a selloff that had already been underway most of the week, said Matt Smith, an analyst with Summit Energy in Louisville, Ky.
"Now we are seeing some position-taking and some buying interest coming into the market before the weekend, at a price level at what has been a favorable entry point in recent months," Mr. Smith said.
Friday's buying was bolstered by forecasts for warmer-than-normal weather in the eastern U.S. during the next two weeks—potentially lifting demand for gas-fired electricity to power air conditioners—and a declining number of drilling rigs aiming for natural gas.
"Next week should be the warmest of the season so far for the East Coast cities as temperatures persistently reach the 80s," said meteorologists with private forecaster Commodity Weather Group. "Combined with moderate humidity levels, it could feel like the 90s at times."
Meanwhile, Baker Hughes said that as of last Friday the number of rigs drilling for gas fell by eight from the week before to 866—the lowest level since January 2010. The oilfield-services firm, however, said the number of oil rigs grew by seven to 954, which could mute the impact of the gas-rig reduction since most oil wells also yield a significant amount of methane.
Traders watch the rig count closely for signs that producers are pulling back to limit supply growth.
Still, some are skeptical that prices will push higher, noting that the benchmark contract has ended up at nearly the same price the last two weeks.
"Despite the lively buying by the bulls this morning, this still appears to be a another week of range trading," Pax Saunders, an analyst with Gelber & Associates in Houston, wrote in a note to clients.
Source: http://online.wsj.com/article/SB10001424052748704816604576335151470837450.html
Canadian Natural Gas Prices Climb as Price Drop Prompts Buying
Canadian natural gas for June delivery rose for the first day in five as traders sought bargains and covered bets on earlier declines.
Gas at Canada’s benchmark AECO C hub in Alberta had slipped 6.2 percent since May 16, according to data compiled by Bloomberg. The prospect that prices may have hit bottom probably has some traders covering short positions, or bets on price declines, said Martin King, senior commodities analyst at FirstEnergy Capital Corp. in Calgary.
“They couldn’t push it any further to the downside” without hitting technical resistance, King said. “It’s been moving back and forth in a range.”
Alberta gas for June delivery rose 9 cents, or 2.6 percent, to C$3.56 per gigajoule ($3.48 per million British thermal units) as of 2:30 p.m. New York time, according to NGX, a Canadian Internet market. Gas traded on the exchange goes to users in Canada and the U.S. and is priced on TransCanada Corp.’s Alberta system.
Natural gas for June delivery on the New York Mercantile Exchange rose 13.6 cents, or 3.3 percent, to settle at $4.23 per million Btu.
Spot Prices Fall
Gas for prompt delivery tumbled as cool weather forecast for the U.S. Midwest pares air-conditioner use. Chicago will have a high of 59 degrees Fahrenheit (15 Celsius), about 15 degrees colder than normal, according to State College, Pennsylvania-based forecaster AccuWeather Inc.
Gas at the Alliance Pipeline delivery point near Chicago fell 11.73 cents, or 2.8 percent, to $4.1042 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry 1.5 billion cubic feet a day to the Midwest from western Canada.
At the Kingsgate point on the border of Idaho and British Columbia, gas slipped 14.46 cents, or 3.6 percent, to $3.8253 per million Btu, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas was down 15.51 cents, or 3.8 percent, to $3.9416.
Alberta System
Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.2 billion cubic feet as of 2 p.m. in New York, 51 million above its target level. Some Alberta producers have been forced to shut gas wells because of forest fires in the northern portion of the province.
Gas was flowing at a daily rate of 2.74 billion cubic feet at Empress, Alberta, where the fuel is transferred to TransCanada’s main line.
At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 1.59 billion cubic feet.
Available capacity on TransCanada’s British Columbia system at Kingsgate was 506 million cubic feet. The system was forecast to carry 1.48 billion cubic feet today, about 75 percent of its capacity of 1.98 billion.
The volume on Spectra Energy’s British Columbia system, which gathers the fuel in northeastern British Columbia for delivery to Vancouver and the Pacific Northwest, totaled 2.87 billion cubic feet at 1:50 p.m.
Tuesday, 17 May 2011
Natural Gas Daily Fundamental Analysis for May 18, 2011
Natural gas prices dropped on Tuesday as weather forecasts signaled temperatures will be below the average for this time of the year in several parts of the United States including the South and East, which raised speculations of lower demand on power plant fuel, and accordingly, natural gas prices dropped.
Natural gas prices should continue to fall on Wednesday, as speculations of moderate weather conditions should continue to push natural gas prices lower.
Natural Gas Futures in New York Fall as Mild Weather Cuts Cooling Demand
Natural gas futures slipped in New York for the first time in four days on concern that demand for the fuel may decline after data showed U.S. industrial production unexpectedly stalled in April.
Gas dropped 3.2 percent after the Federal Reserve reported output at factories, mines and utilities was unchanged following a 0.7 percent gain in March. Industrial consumers account for 28 percent of the nation’s gas demand, according to Energy Department estimates.
“The domestic industrial production number is really weighing on the market,” said Jason Schenker, the president of Prestige Economics in Austin, Texas. “The implication is that weaker industrial output could sap some gas demand.”
Natural gas for June delivery fell 13.6 cents, or 3.2 percent, to settle at $4.182 per million British thermal units on the New York Mercantile Exchange. Prices have fallen 5.1 percent this year.
The data reflected a decline in automobile output as the Japanese earthquake and tsunami disrupted supplies, the Federal Reserve said. Economists had forecast a 0.4 percent gain in industrial production, according to the median estimate in a Bloomberg News survey.
Capacity utilization, which measures the amount of a plant that is in use, fell to 76.9 percent last month from 77 percent in March. The gauge compares with the average of 79.5 percent over the past 20 years.
Cooler Weather
Gas also slid as cool weather reduced demand for gas-fired electricity to run air conditioners. Forecasters including Commodity Weather Group LLC in Bethesda, Maryland, said temperatures will be below normal in parts of the Midwest, Southeast and Northeast through May 21.
Power plants use 30 percent of the nation’s gas supplies, according to the Energy Department.
“There is not an abundance of confidence in gas with the cool weather,” said Brad Florer, a trader at Kottke Associates Inc., an energy trading firm in Louisville, Kentucky. “We’ve been in this overall shrinking consolidation for months.”
The high temperature in Boston on May 21 may be 63 degrees Fahrenheit (17 Celsius), 5 below normal, according to AccuWeather Inc. in State College, Pennsylvania. The high in Chicago may be 73 degrees, matching the normal temperature.
Cooling demand in the Northeast may be below-normal through May 21, David Salmon, a meteorologist with Weather Derivatives in Belton, Missouri, said in a note to clients today.
Nuclear Power
U.S. nuclear-power production rose 1 percent as operators boosted reactors in Illinois, Georgia, Florida and Louisiana, the Nuclear Regulatory Commission said. Higher atomic output can reduce the demand for natural gas in power plants.
Nuclear power generation nationwide increased 776 megawatts from yesterday to 76,730 megawatts, or 76 percent of capacity, according to an NRC report today and data compiled by Bloomberg. Twenty-six of the nation’s 104 reactors were offline.
Exelon Corp. (EXC) boosted the 882-megawatt Quad Cities 2 reactor on the Illinois side of the Mississippi River to 100 percent of capacity from 85 percent yesterday. Another unit at the site, the 882-megawatt Quad Cities 1, is shut. The plant is located about 20 miles (32 kilometers) northeast of Moline.
Gas futures volume in electronic trading on the Nymex was 230,595 as of 2:40 p.m., compared with the three-month average of 307,000. Volume was 253,975 yesterday. Open interest was 955,823 contracts. The three-month average open interest is 945,000.
The exchange has a one-business-day delay in reporting open interest and full volume data.
Natural Gas Technical Analysis for May 17, 2011
The natural gas market has made another bullish candle during Monday’s trading session, and it appears that the $4-$4.20 area is going to hold yet again. The market still looks like a choppy environment with a bullish bias to it. We are buyers only, and would be interested if we can clear the Monday highs. It would take a move below $4 for us to consider selling.
(Source: http://www.commoditiesmansion.com/technical-analysis/natural-gas-technical-analysis-for-may-17-2011/)
Natural Gas Pulled Down by Data Concerns
NEW YORK (TheStreet) -- A projected inventory jump and a downbeat industrial production report drove natural gas futures lower on Tuesday.
One of the biggest laggards among commodities, natural gas for June delivery recently was quoted off 3% to $4.188 per million British thermal units, erasing the previous day's gains, but narrowly avoiding Friday's low of $4.153.
"Futures fell to $4.16 in early trading, blowing off the carried-away buying we saw roll through yesterday's session on concerns from Friday's rig count report," a Gelber & Associates report said.
On Tuesday, the Federal Reserve said industrial production was flat in April compared with an increase of 0.7% in March. Analysts, on average, were expecting a 0.4% increase in April.
The lower-than-expected reading came as total vehicle assembly dropped, mainly because of parts shortages that resulted from the earthquake in Japan, the Federal Reserve said on Tuesday. However, it's worth noting that the lackluster report for April wasn't an isolated incident as industrial output for February was revised to a 0.3% decline. Previously it was reported to have edged up 0.1%.
The Federal Reserve also said that in April, manufacturing production fell 0.4% after rising for nine consecutive months.
"Still too early to call this one, but it's becoming a bit clearer that the continuation of manufacturing recovery sold to the public has neared its limits with the chokehold of higher commodity costs," the Gelber report said.
"This has been our message since before QE2 (the Fed's second round of quantitative easing) began last year. Industrial natural gas demand cannot easily keep growing this year as we slip into maintenance season."
The industrial sector was responsible for about 27% of all natural gas consumed in the United States last year, according to the U.S. Energy Information Administration.
Last week's mild weather is expected to yield the season's first natural gas stock injection above 80 billion cubic feet this week, the report said. However, cooling demand may increase next week as the weather gets hotter and air-conditioning usage increase - boosting natural gas demand.
Natural gas stocks were trading mixed. Kinder Morgan Energy Partners(KMP_) was falling 1.6% to $70.92, BP(BP_) was rising 0.4% to $42.63, Devon Energy(DVN_) was flat at $81.84, Newfield Exploration (NFX_) was down 0.3% at $69.54, Cheniere Energy Partners, L.P.(CQP_) was 0.8% higher at $16.98, Cheniere Energy, Inc.(LNG_) was losing 2.1% to $7.56 and EOG Resources (EOG_) was up 1% at $105.75.
Natural gas futures tumble on reduced demand outlook
Forex Pros - Natural gas futures were down for the first time in four days on Tuesday, dropping to a two-day low amid indications of reduced demand after forecasts showed mild weather across most of the U.S. next week.
On the New York Mercantile Exchange, natural gas futures for June delivery traded at USD4.170 per million British thermal units during U.S. morning trade, plunging 3.35%.
It earlier dropped by as much as 3.5% to USD4.162 per million British thermal units, the lowest price since May 13.
The Commodity Weather Group said that normal to below-normal temperatures were expected in the U.S. east and southeast through May 21, followed by a shift to above-normal temperatures in the eastern half of the country in the 6-10 day forecast.
Weather service provider AccuWeather said that Boston was expected to have a high of 63 degrees Fahrenheit (17 Celsius) on May 21, five degrees below normal. The high in Chicago may be 73 degrees, matching the normal temperature.
Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.
Meanwhile, a government report showing that industrial production in the U.S. was unexpectedly flat in April weighed on prices. Analysts had expected U.S. industrial production to rise by 0.5% last month after rising by a revised 0.7% in March.
Industrial consumers account for 28% of U.S. gas demand, according to the U.S. Energy Department.
Elsewhere, light sweet crude oil futures for delivery in June slumped 0.85% to trade at USD96.19 a barrel, while heating oil for June delivery shed 0.52% to trade at USD2.847 per gallon during U.S. morning trade.
Read more: http://community.nasdaq.com/News/2011-05/natural-gas-futures-tumble-on-reduced-demand-outlook.aspx?storyid=76271#ixzz1MfAMkCVP
Natural gas drilling moving closer to Delaware River basin
By Sandy Bauers
Inquirer Staff Writer
Although the Delaware River has a moratorium on natural gas drilling until rules are in place, companies are already lining up.
The commission overseeing the river has granted one request for withdrawal of water for natural gas activities, and two more are being evaluated. Yet a fourth was up for a vote last week before it was tabled because of the large flurry of public comments.
Even though the approvals aren't sufficient to allow companies to start drilling now, critics say that any consideration by the Delaware River Basin Commission is premature.
The commissioners say that they anticipate so much work, they simply need to start.
Either way, it signals that natural gas exploration - a common sight in central and Western Pennsylvania - is moving ever closer to the Delaware basin and its river, which provides drinking water for 15 million people, including Philadelphia and many of its suburbs.
"It looks more and more inevitable that there is going to be drilling in the basin," said John Quigley, former secretary of Pennsylvania's Department of Conservation and Natural Resources, now an environmental consultant. "The question is under what rules?"
Even with DRBC permission, the water cannot be taken and used until the commission finishes its rules and more permits are issued.
But getting water withdrawals now will undoubtedly speed things along once regulations are adopted, said Ross H. Pifer, a professor at Pennsylvania State University's Dickinson School of Law. "It just removes one potential hurdle. There are a number of approvals companies are going to need to drill, and this removes one of those from their to-do list."
The proposed DRBC rules, which are generally stricter than Pennsylvania's regulations, were first presented in December. A public-comment period ended April 15.
Originally, staffers estimated final approval would not come until September, at the earliest. But commission Executive Director Carol R. Collier said last week that the agency had received 58,000 submissions, which have to be sorted and responded to.
After that, the commission will decide whether to alter the proposed regulations in response.
The five commission members include the governors of the four states with land in the basin - Pennsylvania, New York, New Jersey, and Delaware - and a federal representative.
Formed 50 years ago, before many major environmental regulations were in place, the commission has broader powers than the Susquehanna River Basin Commission, which regulates only water withdrawals, and the Ohio River basin, which has no commission.
Also, the Delaware basin has waters clean enough to warrant a federal "special protection" designation, which prompts tighter regulatory scrutiny.
The request before the commission Wednesday was from XTO Energy Inc., a subsidiary of Exxon Mobil Corp.
XTO wants to withdraw up to 250,000 gallons of water a day from a tributary of the Delaware River, Oquaga Creek in Broome County, N.Y., to support natural gas exploration and production.
A company spokesman noted that the application was made a year ago. He said the company had drilling activity in 14 states, including Pennsylvania, but that this was its first venture into the Delaware River basin.
New York also has a moratorium on drilling.
As is it done today, drilling for natural gas is a water-intensive activity. For each well, several million gallons of water are mixed with other chemicals and injected into the ground under high pressure to free the gas.
At an impassioned two-hour hearing last week, critics told the commission it was acting prematurely. "Please, what is the hurry?" said Julie Edgar, who said she was a "concerned citizen" from the Lehigh Valley.
Others said DRBC's consideration of water withdrawals smacked of a backroom agreement with the industry.
Since New York state and the DRBC have not yet authorized hydrofracking, "then what is the message that is being communicated with this withdrawal docket?" asked Edie Kantrowitz, who identified herself as a concerned citizen from New York City. "Is it a done deal?"
Penn State's Pifer doubts it. "As you look at the various governmental agencies that have acted in Pennsylvania, I think it would be a real stretch to consider the approach of the DRBC as pro-drilling," he said.
Many critics have called for the commission to halt all regulatory activity until a cumulative environmental-impact study can be done.
For that, the commission needed a congressional appropriation. U.S. Rep. Maurice Hinchey (D., N.Y.) and others got committee approval for $1 million for the study, but the measure later failed.
A Hinchey spokesman said the commission should not give any approvals before the study was done.
But the commission's federal representative, Brig. Gen. Peter A. DeLuca of the Army Corps of Engineers, said at the hearing Wednesday that it was time to move ahead.
He said that the commission didn't want to get caught in a Catch-22 situation, "where we wait for a study that there is no funding for."
DeLuca said that considering water withdrawals now was prudent. "When the regulations are done, there's going to be a big blast of a workload," he said. "We know the commission staff is not going to grow in size. If we can address a piece of the workload now, we're OK with that."
Only two people at the hearing testified for the proposal.
Dewey Decker, a supervisor in Sanford, N.Y., which is near the creek, said the local economy was depressed and needed an economic boost from natural gas drilling.
Rick Williams, a Sanford resident, said landowners in the area "overwhelmingly support XTO's application."
"We're a dying town," he said. "We all welcome this as a positive step . . . to secure our future."
The area of the proposed withdrawal is about four hours north of Trenton, where the commission is based and where last week's meeting was held.
Many complained that the notice had gone out two weeks earlier and few could take the day off.
Ultimately, the commission decided not to vote on the matter because of the volume of public comment - more than three dozen testified. Before the meeting, the commission received 70 to 100 e-mails, as well as 100 printed comments, and more were handed in at the meeting.
By a unanimous vote, the commission decided to extend the public-comment period for 30 days and hold a hearing closer to the site.
The XTO spokesman said later that the company understood "the DRBC's position and interest in providing the public more time to review and comment on our permit request" and that it "looks forward to the DRBC resuming consideration of our water-withdrawal application."
While some at the hearing had brought up the Exxon Valdez oil spill and said the company had not responded adequately, the spokesman said that "XTO has a proud history of safe operations."
In July, the commission approved a Stone Energy request to withdraw 700,000 gallons a day from the West Branch Lackawaxen River in Mount Pleasant Township, Wayne County.
The commission conducted a public hearing for that request and another for a natural gas production well at the site, and received 1,700 comments.
Commission scientists are evaluating two more requests.
One is from F.E. Kamp Inc. for a withdrawal of up to 5.6 million gallons during a 30-day period from a well next to the West Branch of the Delaware River in Deposit, N.Y.
The other is from the town of Deposit, which wants to continue current water withdrawals but get permission to provide up to 200,000 gallons of water a day to the natural gas industry.
The applicant indicated it had one request from Newfield Appalachia PA, L.L.C. to buy up to 200,000 gallons per day for drilling and fracturing activities in Wayne County.
