Some Northeast citygates peaked above $9 and realized dollar-plus increases Friday amid gains at nearly all points in trading for the holiday weekend. That was hardly surprising with freezing weather due throughout Canada and most of the U.S. And for a change cash prices had prior-day screen support to set against the usual extra decline of industrial load during a long weekend.
Losses at three points were the exceptions to prices ranging from flat to a little more than $1.15 higher. Iroquois Zone 2 had both the top quote of $9.35 and the leading average of a little more than $9. The smallest increases were concentrated at western points.
Precious few areas outside the desert Southwest, southern Texas and the Florida peninsula were expected to escape sub-freezing conditions until a warm-up begins early this week. Below-zero lows were due Saturday in much of the Plains region along with the upper Rockies and upper New England, and life-threatening wind chill factors could be expected in those areas along with several others, according to The Weather Channel. Lake-effect snows would continue to add to already existing accumulations in the Midwest and Northeast, it added.
Although there were no confirmable reports of wellhead freeze-offs, Williams Field Services cautioned all shippers and operators of potential production shortfalls at the Echo and Opal Plants in the Rockies for that reason, citing "extreme cold temperatures in the production area...Should production in the field not meet tailgate sales volumes, WFS will initiate cuts" based on its best available data. "Since we cannot predict the effect this will have with regards to cuts shippers may experience, please make sure that you have ranked your deliveries in anticipation of possible reductions to your supply." Panhandle Eastern had previously warned of possible Midcontinent freeze-offs (see Daily GPI, Feb. 17).
In addition, Kern River, which relies on Opal for much of its supply, reported experiencing low linepack due to significant drafting during the previous 24 hours. It said that if drafting continued, it would "take whatever actions are necessary to ensure the integrity of the system is maintained."
Noting that Minneapolis was "enjoying" temperatures of 6 below zero Friday afternoon, a marketer said he would hate to be trading Northern Natural Gas points, adding, "You would have to be firm, firm, firm [transport] to move gas on that pipe." However, he saw little chance of firmer prices sticking around for long this week, noting that Chicago was predicted to have a low of 13 on Saturday but be 20 degrees higher Tuesday. The situation was much the same for the Northeast, he said.
A western trader was surprised that the screen didn't rise any more than it did (March futures were up 4.8 cents) considering how unseasonably cold the weather was getting. Apparently the abundance of storage inventories tempered any bullishness of Nymex traders, he said. He said Sumas was priced above the PG&E citygate and Southern California border for a while, and although Sumas fell near the end for a dime-plus daily loss, it maintained its premium to the border and was just barely edged out by the gate. Despite its decline, Sumas was still priced nearly 40 cents above domestic Northwest supply as the pipeline's Stage II entitlement (see Daily GPI, Feb. 17) made it difficult for the domestic product to get past the Kemmerer (WY) Compressor Station to frigid Pacific Northwest markets, he said.
Sumas strength is likely to continue this week as Northwest encouraged buying there due to planned repairs at midweek to a segment in Washington where land movement had occurred (see Transportation Notes).
A Northeast marketer acknowledged that some citygates had topped $9 at their high ends, but said they "really came off at the end of day" by as much as half dollar from their peaks. The large market-area gains resulted in "healthy" Gulf Coast-Northeast basis spreads of $1.50 or so, he said, allowing traders who had the necessary transport service to make a mint. But he added that compared to previous cold snaps, the current one was rather wimpy. He recalled seeing a lot more price volatility last summer than he did Friday because the market is assured of ample storage supplies now whereas storage supplies were still kind of iffy back then.
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