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NYC Leads Northeast Uprising; Other Regions Mildly Softer
The Big Apple was where the big prices were Monday. Transco's Zone 6-New York City pool spiked as high as $18 and rose more than $2 on average to lead more modest gains at most other Northeast points as a new winter storm took aim at southern portions of the region. However, spreading cold in the rest of the U.S. gave little price support to the general market, which ranged from a few cents higher to down about 15 cents.
A mix of snow, sleet and freezing rain was poised to extend a lengthy winter punishment of much of the Northeast Tuesday, according to The Weather Channel, but would merely keep upstate New York and New England in freezing conditions with little precipitation. That likely was why Algonquin citygates broke out of the overall Northeast price mold with a contrarian loss of nearly 40 cents.
The Midwest is expected to see primarily snow Tuesday with high temperatures remaining well below midwinter norms, but citygates there -- unlike in the Northeast -- joined Monday's overall market declines. Similarly cold weather is stretching through the northern two-thirds of the West but stopping short of the West Coast.
The key change from last week's cold weather is that it is penetrating much farther south now, sending an ice storm into the Carolinas Sunday. In addition, a Dallas-area marketer said a cold front had reached the city Monday and was due to take thermometer levels into the 20s that night. And Houston traders were bracing for overnight lows in the mid 30s Tuesday.
An intrastate Texas trader noted that with the screen's dive of more than 30 cents, production-area prices closed part of their spread below futures. For example, Katy was trading around 65 cents behind the screen Friday but the gap had tightened to about 40 cents Monday, he said. The South Texas Project's #1 nuclear unit had tripped off Sunday and helped create fairly strong power prices in Texas Monday, he said, but load was still soft enough that Katy fell nearly a dime.
A Northeast utility buyer said his company is currently pulling hard from its regular storage account but is not worried about the rest of the heating season, expecting to have its inventory still 50% full at the end of January. But it's not tapping peaking storage at this point, he added; "we're actually injecting a little bit there." He reported having trouble finding any markets for Dominion South Point gas Monday.
"I'll tell you why gas jumped so much at New York citygates," said a Northeast trader. "It's cold up here! Our high was in the low 20s Monday, and I don't see relief soon." He anticipates a big withdrawal in Thursday's storage report, saying he wouldn't be surprised to see the EIA estimate near 200 Bcf.
Citigroup analyst Kyle Cooper also expects a large draw, saying his initial estimation is "probably" in the range of 180-190 Bcf, which would compare with 247 Bcf a year ago and a five-year average of 154 Bcf. But Cooper added, "However, that [180-190 Bcf] was also our estimation for last week and obviously that was way too high...There is also already some talk that there will be a revision. We do not believe that to be the case, but there is that rumor floating about."
A Southwest trader reported February deals in the high $4.90s for Transwestern-Permian (which happened to match her swing numbers), in the low $5.20s at the California border into SoCalGas, and in the upper $5.20s for Panhandle Eastern. However, futures weakness was taking Panhandle lower Monday afternoon, when the bid-offer spread was down to $5.165-24, the trader said.
A marketer who had indexed all his bidweek volumes so far said he was finding "a lot more people interested in selling me gas for February than in buying from me." He was seeing Katy basis at minus 5-2 cents and quoted a Waha deal at just over $5.
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