A screen plunge of nearly 90 cents the day before virtually assured further cash softness Friday, but the physical market also was depressed by moderating trends from the heating load created by widespread severely cold weather in the first half of the week and by the drop in industrial load that occurs over a weekend.
Double-digit losses were recorded at all points. They ranged from about 15 cents to nearly a dollar.
Despite the general trend toward slightly milder weather, icy precipitation was still in the weekend forecast for the southern Appalachians and parts of the Northeast, Midwest, Plains and upper West. The Midwest/Plains area actually would be just about as cold as it was around midweek, The Weather Channel said, with temperatures averaging 5 to 20 degrees below average through Monday.
Southern Natural Gas lifted the only remaining pipeline OFO in the East Friday, but MRT said it would be implementing an OFO-like constraint Sunday due to forecasts of colder weather in its service area (see Transportation Notes). In the West, on Friday Northwest was still under a Stage III Unauthorized Overrun Entitlement with 13% imbalance tolerance that was declared last Monday.
Tennessee had some good news for producers offshore southeastern Louisiana who have been hampered in hurricane recovery efforts by outages of processing plants in the area. Tennessee reported being informed by Targa, operator of the Yscloskey Processing Plant, that installation of equipment at Yscloskey to allow up to 600 MMcf/d of processing may be completed this week.
Despite their major softness, Northeast quotes were rising toward the end of trading, as apparently some people perceived good buying opportunities in the third day of big citygate declines, a Houston-based marketer said. He reported seeing a weather forecast "that was looking pretty bearish" through the end of the month.
Weekend weather would be relatively moderate in most regions compared to early last week, the marketer continued, but new cold and snow are forecast for early this week in northern market areas. He found it difficult to make a call on whether cash prices would be able to mount a rally Monday, saying heating load will be going back up a little, but the screen had been very negative in its last three trading days.
A western source said the market appeared to be getting more sedate and quiet as last week went on, adding that he hopes it stays that way through the end of the month. He was aware of some people already trying to do January business because of plans for holiday vacations by many traders. San Juan Basin buyers were trying to find index-minus pricing, but the suppliers held back and virtually nothing was getting done late last week, he said. A lot of San Juan supply is already locked up in term commitments anyway, he said. The Southern California market is currently seeing a smidgen of heating load at night, but temperatures are "very nice during the day," he said.
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