Through Thursday of last week there were at least a few exceptions to general price movement, but on Friday all points were united in one direction: down by double-digit amounts.
There were parts of the Midwest and Northeast starting to turn a bit colder again, but not by enough to support higher prices, and they were expected to be warming up again by Monday. In addition, the screen’s drop of nearly a dime Thursday, the usual weekend drop in industrial demand and sagging cooling load in the South played a part in depressing cash quotes.
Some of the air conditioners turned on last week while most of the South was seeing daily highs in the 80s likely were about to get turned back off as a storm system moving eastward from the Rockies was expected to cool things off with a copious amount of widespread rain over the weekend. Highs in the 80s would remain in effect Saturday along the Gulf Coast, The Weather Channel said, but away from the coast more comfortable thermometer levels in the 70s and 60s would prevail.
That same storm system was bringing chillier conditions to the Midwest Friday, and a Canadian cold front would do the same to the Northeast Saturday, taking lows in New York state and New England to the freezing area. However, the cold surges were expected to be short-lived, with both regions in warm-up trends again by the beginning of this week.
The West, which had recorded almost solidly higher prices through Thursday, joined in Friday’s pervasive softness. Stormy conditions were due to continue in California and the Pacific Northwest, but Friday’s exit of a major storm from the Rockies would leave considerably milder weather in its wake. A high of nearly 70 degrees was predicted for Denver Saturday, following Friday’s high in the upper 40s.
Extra supplies likely will be reentering the Gulf Coast market Monday. Ten platforms on the Matagorda Offshore Pipeline System that have been shut in since the beginning of March are expected to be able to resume full production that day, according to MOPS operator Northern Natural Gas (see Transportation Notes).
A Gulf Coast producer said the New York City metro area was anticipating a cold and rainy weekend with a freezing low due Saturday, which may have been responsible for Transco Zone 6-NYC seeing Friday’s smallest price drop of just over a dime. But even with a freezing low also forecast for Boston and other parts of the Northeast, regional citygates were down substantially, he noted. The Northeast should be mild again by the middle of this week, he said.
It seems like often one day the forecast is for colder weather, and the next day it’s for a warm-up, which complicates trading strategy, the producer lamented.
The two Appalachian pipes traded flat to each other again Friday, he went on. He was unable to tell at that point whether Dominion’s restriction of Appalachian East capacity (see Transportation Notes) will be a problem this point. In his opinion, Thursday and Friday were “blah days” in the spot market. Noting the screen decline of 22.9 cents Friday, he commented that “technicals” are practically the sole futures drivers currently, with fundamentals seemingly having little to no influence.
The gas buyer for an LDC in the Lower Midwest said area weather was warm until Friday, and colder temperatures would last through Saturday before a warm-up began Sunday. “Even today [Friday] we’re not getting much heating load” because of residual warmth from the previous couple of days, he said. He reported not buying any new gas recently, even for the cooler weekend. Company throughput will grow in hot weather because it serves a pretty good amount of power generation load, the buyer added, “but it’s got to get a lot warmer” for that to happen. Highs will be in the 70s again by early this week, he said.
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