The transition to spring may have officially occurred Sunday, and sources indicated that many people were enjoying the appropriate weather. But there seems to be some trouble getting Old Man Winter off the seasonal stage, as a significant winter storm bearing snow starts moving westward from the Plains into the Midwest as early as Tuesday. From there colder conditions will continue spreading through the Northeast and eventually the South.
With a little help from the renewal of industrial load following the weekend, the result was flat to nearly half a dollar higher prices at nearly all points Monday. Only three locations with minuscule drops of 2-3 cents were left out of the overall softness.
Although the Midwest will bear the brunt of most of the initial storminess, the Northeast was already due to experience cold temperatures and a bit of snow in upper New England as early as Tuesday, according to The Weather Channel. Thus, as usual the Northeast showed the greatest market sensitivity to cold spells in leading the advance with most of the larger two-digit upticks.
April futures have seemed a bit anemic after following Thursday's big storage report-induced jump of 22 cents with a mere penny addition Friday. The contract went into modestly negative price territory in falling 0.7 cent (see related story).
Although the Algonquin citygate recorded one of the day's biggest gains of nearly 35 cents, IntercontinentalExchange (ICE) said the citygate volumes on its platform diminished from 267,600 MMBtu Friday 175,200 MMBtu Monday. The pipeline was still asking customers to run neutral or even positive imbalances in its New England market area, where Tuesday lows were forecast to be in the 20s and occasional teens.
The Southern California border had risen 6 cents Friday in the face of a high-inventory SoCalGas OFO going into its second day, the cancellation of the OFO Sunday (see Transportation Notes) allowed border quotes to jump another 16 cents or so Monday, while ICE trading activity there also saw a major jump from 424,300 MMBtu to 679,300 MMBtu. But although SoCal citygate numbers increased by about the same amount as at the border, their ICE volumes receded from 567,700 MMBtu to 516,400 MMBtu.
At first it will primarily be the Upper Midwest shivering in freezing lows Tuesday, as lows will stay in the mid 30s to 40 area from Iowa through Illinois and Ohio, with precipitation mostly staying liquid from there southward.
The South and most of the West will see a gamut of warm to chilly weather for a while longer.
Local folks didn't need any jackets at lunchtime Monday, but it won't be long before they don them again because temps will be getting quite a bit cooler from midweek onward, with overnight lows in the 40s and likely even chillier, said a Midwest utility buyer. He thinks this could be the last significant boost of heating load that the utility gets before spring conditions become entrenched. Also, this week's burst of cold is likely to be short-lived since currently there is no snow cover on the ground in the area.
A marketer in the Upper Midwest expects conditions to get a little worse than that in her neighborhood, saying the forecast calls for lows in the 30s and possible snow later this week. But like the utility buyer, she had doubts about whether any more significant cold blasts will arrive after this week.
For the time being, a Southern utility buyer was in a quite different situation. He probably was representative of most of his counterparts in the South in reporting that area customers are talking about getting their air conditioners maintained in preparation for summer heat, "because they know it's coming." However, it's still too early for the utility to see any detectable bumps in cooling demand, even with much of the region having highs starting to reach around 80 or slightly higher. Also, the South will not escape getting one more reminder, albeit a light one, of winter, he said.
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