Natural Gas Intelligence
Cash Quiet While Futures Swing Back And Forth

Thursday, August 16, 2012

A  vast majority of natural gas cash points took their cue from Tuesday's 10.5-cent increase in September futures to post gains -- albeit small -- on Wednesday for Thursday delivery. However, if they continue to follow that model, declines could be in store on Thursday as the prompt-month futures contract on Wednesday gave nearly all of the prior-day's gains away.

Compared to the recent fairly wide swings in natural gas futures, cash market movement has been much more muted. On Wednesday most of the market posted gains of a few pennies or stayed flat. A handful of declines were mixed in across the country.

California, which has been embroiled in a week-long heat wave, was unchanged outside of Malin, which gained 5 cents to average $2.74, and SoCal Citygate, which shaved a penny to average $3.11.

Along the Gulf Coast, change was pretty stagnant on Wednesday for Thursday delivery. The Henry Hub and ANR SE each gained 3 cents to average $2.82 and $2.76, respetively, while the Houston Ship Channel added 2 cents to average $2.83.

Bentek Energy is on record with a 20 Bcf injection estimate, while a Reuters survey of 25 industry participants produced an average expectation of a 24 Bcf build.

"The weak build is primarily driven by low Producing Region figures that resulted from high salt dome withdrawals to meet cooling demand," Bentek said in it's Analytics Report. "Initial estimates show Producing Region injections have rebounded so far this week, suggesting the strongest draws of the summer may be over."

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