The weather was due to turn a bit colder Friday but not match the super-frigid conditions of the Presidents Day holiday weekend until Saturday and Sunday. So with the previous day’s screen plunge of 44.8 cents for guidance, cash prices fell at all points Thursday. Nearly all losses were in double digits.
Other than modest dips in Western Canada, no geographic area stood out as particularly stronger or weaker among overall declines ranging from about C5 cents (Westcoast Station 2) to nearly 35 cents.
Cold fronts will move into both the Northeast and Midwest Friday bringing snow to parts of each region. But the accompanying minor dips in temperatures will be magnified greatly over the weekend. The South will remain fairly moderate through Saturday before colder air arrives to take temperatures to five to 15 degrees below average east of the Mississippi River around Sunday. The West also will stay fairly quiet with snow showers confined to its upper sectin until a storm arrives in the Pacific Northwest late Sunday and buries the Cascades and Sierra mountain ranges in heavy snow, The Weather Channel said. That will be followed by another storm along much of the West Coast Tuesday, but little appreciable impact on overall western temperatures is anticipated.
The Energy Information Administration’s estimate of a 123 Bcf pull from storage during the week ending Feb. 17 fit comfortably within the range of prior expectations, but was largely judged as a market nonevent coming so late in the withdrawal season and occurring against the backdrop of what are still expected to be record amounts of inventory on March 31. The report actually reduced the surplus to year-ago levels (see futures story), but Nymex traders tested sub-$7 territory again before eventually sending the March futures contract up 17.5 cents on the day before expiration.
The one-two punch of much colder weather forecast for the weekend and Thursday’s screen gain is expected to result in a cash market rally Friday.
The Northeast is expected to get about as cold this Saturday and Sunday as it did during the holiday weekend, with highs in the teens predicted, said a utility buyer in the region. However, his company is still swimming in storage supplies, so it doesn’t plan to bother with buying new gas for quite a while, he added. It will rely on storage withdrawals to get through the weekend’s arctic blast, using pipeline peaking supply to fill in any cracks as needed, he said. The utility’s storage contract requires only that it get down to the 30% inventory level by the end of withdrawal season, he said, and it is anticipating much cheaper refills this summer.
A marketer in the Upper Midwest said her area is forecast to see temperatures in the 20s and more snow this weekend. “It seems like winter doesn’t want to let go quite yet,” she said. She reported buying March gas at basis of plus 18 cents at the Consumers Energy citygate and at plus 16 cents for MichCon.
A Midcontinent marketer reported Chicago citygate basis at minus 11-8 cents Thursday morning while the screen was down. That indicated stronger basis than on Wednesday, but she cautioned that “the numbers are all over the place.” She had seen Chicago basis quoted as weak as minus 24 cents, but said it was being offered at minus 5 cents Thursday afternoon on an online trading service; however, there were no bids at that point. It will be a colder weekend in the Midwest, she said, but “nothing major” in the way of increased heating load.
The Weather 2000 consulting firm tended to confirm that, saying that the most frigid thermometer readings had hit the Midwest during the Presidents Day weekend, but the next wave of cold will strike the Northeast the hardest. Canadian air masses are attempting to cumulatively compensate for January’s thaw, the forecasting service said. Over the holiday weekend, “the latest wave of arctic air poured into the U.S., chilling Kansas City down to 4 [degrees], Cincinnati down to 3, Chicago down to -7 and Minneapolis down to -13 (twice).” Along with widespread temperature departures of minus 20-30 degrees from the Rockies to the Appalachians, “many residents are having to endure the ‘price’ for the January thaw, as the cold air gradually makes its mark by hook or by crook this winter…,” said Weather 2000.
©Copyright 2006Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |