Prices rose at all points Thursday. But while quotes were firmer at most or all points Monday or Tuesday in spite of generally light weather-based load, this time they could count on some heating or cooling load in a few areas to go along with prior-day futures support. One source also cited storage buying as a market booster.
Increases ranged from a little less than a nickel to about 35 cents. The Rockies recorded most of the smallest gains, while the largest ones in the 20s and 30s were scattered across several market areas.
The Energy Information Administration's report of a 65 Bcf build in storage during the week ending May 2 was at the top end of the range of consensus expectations, but it could have been considered bullish because it lagged behind comparable historical injections. However, Nymex traders sent June natural gas 6.4 cents lower despite crude oil making a marginal advance after a temporary foray above $124/bbl.
A cold front will push temperatures considerably lower in some parts of the Northeast Friday. For instance, Boston was expected to peak around 76 degrees Thursday but can expect a high of only 57 Friday, according to Madison, WI-based Weather Central. The Midwest was already fairly chilly Thursday but was due to get slightly warmer Friday.
Although the eastern end of the South is staying relatively moderate with highs on either side of 80, temperatures approaching and occasionally hitting 90 or more in the region's western half have air conditioners humming. Those kind of heat levels will be spreading into more of the South this weekend, The Weather Channel predicted.
With predicted highs in the 60s and 70s throughout much of the West (but significantly hotter weather due in the desert Southwest), the region is experiencing only a modicum of either cooling or heating load. But near-freezing lows are returning in parts of Western Canada, prompting gains of about C25 cents at both NOVA Inventory Transfer and Westcoast Station 2.
After seeing one of Wednesday's top losses due to a high-linepack OFO by SoCalGas, the Southern California border was among the top gainers Thursday with an uptick of more than 30 cents when the OFO was not renewed.
Florida Gas Transmission kept an Overage Alert Day in effect for the third day Thursday, but while the Florida citygate saw a sizeable advance of about a quarter, Florida Gas Zone 3 could manage to rise only about a nickel.
Storage buying had a lot to do with driving Midcontinent gains, according to a producer in the region who said several buyers told his company that their purchases were targeted for injection. After experiencing highs in the 80s last week, the Midcontinent is starting to warm up again after a temporary cooldown, he said. He considered current conditions "mild."
Even with the recent heat spell the producer didn't think there was much cooling load in the region, saying most people just opened their windows to catch breezes instead of firing up the air conditioner.
Numbers were rising in late cash deals, he said, and that usually signals gains the next day. But he thought Thursday's futures weakness and the weekend factor may soften cash quotes Friday.
The producer said he is taking predictions of difficulty in refilling storage unless LNG imports increase (see related story) "with a grain of salt." He is among those who expect the industry to be able to have sufficient gas in inventory by next winter.
Technically it's spring, but a Calgary-based producer said there was up to eight inches of snow in the local forecast for Thursday night. The colder weather (Thursday's low was just above freezing) is keeping a little more gas at home than usual, he said, but if the gas is needed elsewhere, it'll get there if the price is right. That would tend to lower the amount of supply targeted for Alberta storage, he said.
The producer noted that much of eastern North America going to turn cooler next week, "but we're talking the middle of May," so below-normal temperatures don't necessarily translate into greater heating load at this time of year.
A "whole bunch" of maintenance projects on El Paso this month is giving his company's traders "a real challenge" on keeping up with the constraints, he said.
The Calgary producer agreed with his Midcontinent counterpart that prices were rising in late deals at some locations Thursday, though not everywhere. However, "I think cash intuitively wants to weaken Friday, " he said.
Going forward, the producer said, his company is looking for increasing storage injections to keep the cash market supported. Its perception in the West is that only SoCalGas and PG&E are injecting rapidly, "and even they got off to a slow start" on refills, he said.
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