Natural Gas Intelligence
Humidity, Outages Prompt Northeast Gains; Futures Ease

Thursday, September 06, 2012

The physical market overall on average rose 6 cents Wednesday led by volatile trading at Northeast points. Eastern locations as well as Marcellus market points gained, but Midwest locations inched higher. At the close of futures trading October had fallen 5.9 cents to $2.795 and November was off 6.3 cents to $2.937. October crude oil rose 6 cents to $95.36/bbl.

Northeast markets continued their volatile trading as traders reported restrictions on gas entering pipelines such as Algonquin and Tennessee from the Maritimes and Northeast pipeline system.

"There is an outage from Sable Island and they will not be sending any gas down for a few days," said a Northeast marketer. He added that he expected the outage to impact the market for the next several days, "but the demand should be going down with lower humidity and the upcoming weekend, but until then we should see stronger prices." forecast that Boston's high of 82 Wednesday would ease to 81 Thursday before rising to 84 on Friday. The normal high for this time of year in Boston is 76. Relative humidity Wednesday resulting from remnant moisture from Isaac was seen as high as 87% and Thursday was forecast to reach a muggy 90%. By Friday relative humidity was anticipated to drop to 79%.

Citi Futures Perspective analyst Tim Evans is calculating a storage build of 38 Bcf, well below last year's 62 Bcf and a five-year average of 60 Bcf. Ritterbusch and Associates is looking for an increase of 43 Bcf and Bentek Energy, using its North American flow model, sees a 23 Bcf build.

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