With a major winter storm bearing down on the Northeast after dumping copious amounts of snow in the South Atlantic and Mid-Atlantic states, prices were up across the board Monday. All Northeast citygates recorded $5-plus advances, with a few skyrocketing by more than $7.
The previous Friday's gain of 12.1 cents by April futures and the return of industrial load from its typical weekend drop were other bullish factors for the cash market.
Gains ranged from a little more than a dime to about $7.60. The Rockies saw most of the smallest gains, and their averages, which remained less than $3, were in sharp contrast to Northeast deliveries exceeding $10 in all cases.
Natural gas futures appeared poised for much of Monday to deliver more prior-day screen support to Tuesday's cash trading, but the April gas contract finally got dragged into negative territory by tremendous weakness in Nymex's petroleum product offerings (see related story).
Florida Gas Zones 2 and 3 saw increases of about 40 cents or more after Florida Gas Transmission issued an Overage Alert Day (see Transportation Notes).
The all-points price strength occurred despite warming trends forecast for Tuesday in the South, Midcontinent and Midwest. Colder-than-average temperatures are expected to linger through Wednesday in the Southeast, The Weather Channel (TWC) said, but the western end of the South will be well into highs in the 70s by then.
Sub-freezing lows are still being predicted for Tuesday in the Midwest, but that will represent moderation from more frigid weekend weather. Chicago's low was expected to rise from about 16 Monday to the mid 20 Tuesday.
Although most of the storm's snow would be targeting New England and upstate New York Monday night and Tuesday, regionwide temperatures will be 10 to 20 degrees below average Tuesday, TWC said.
Most of the West's severe cold will be limited to the mountainous sections, with conditions elsewhere in the region ranging from merely chilly to warm.
Noting the warming forecasts for the central and southern U.S., a Midcontinent producer said he thought a good deal of Monday's price strength was due to people coming out of the weekend in short supply positions because it got colder than expected, and they had to buy imbalance makeup gas. And there's no doubt that the winter storm along the Eastern Seaboard was creating plenty of heating load, he said. However, the Midcontinent will be getting up to nearly spring-like temperatures in the next couple of days, he added.
Prices were tending downward near the end of trading at some points, but not all, the producer continued. Buyers at a few locations got caught in a late supply pinch and saw their prices going higher instead of down, he said.
Citing milder weather trends, he predicted softness Tuesday at most if not all points.
Another 48 drilling rigs left the search for natural gas in the U.S. during the week ending Feb. 27, according to the Baker Hughes Rotary Rig Count (http://intelligencepress.com/features/bakerhughes/). Two rigs were deactivated in the Gulf of Mexico and 48 were laid down onshore, Baker Hughes said. Its latest count is down 16% from a month earlier and 32% less than the year-ago level.
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