The Northeast proved to be the dominant price mover of gas traded Wednesday for Thursday and the Midwest, Gulf Coast, Midcontinent, Rockies and California generally saw prices move just a few cents either side of unchanged. Thanks to the Northeast region, which saw a 44-cent drop to average $2.35, NGI’s National Spot Gas Average on Wednesday for Thursday delivery fell 12 cents to $2.48.

Cool, wet weather dominated the East, and next-day power prices were mixed. New England pipeline restrictions eased somewhat. Futures reversed course from Tuesday, and at the close May was down by 6.1 cents to $2.619 and June was off 5.9 cents to $2.666. May crude oil dived $3.56 to $50.42/bbl.

Multi-dollar losses were the rule at some New England points as on-peak power prices tumbled and pipeline restrictions were less onerous. Tuesday Algonquin Gas Transmission reported that it had restricted 100% interruptible, 100% secondary out of path and 100% secondary in path nominations sourced from points west of its Cromwell Compressor Station for delivery to points east of Cromwell.

By Wednesday those restrictions had “eased” to “100% interruptible and approximately 84% secondary out of path nominations that exceed entitlements sourced from points west of its Cromwell Compressor Station for delivery to points east of Cromwell,” the company said.

Gas for delivery to the Algonquin Citygates Thursday plunged $3.03 to average $3.58, and deliveries to Iroquois Waddington shed 6 cents to $2.95. Gas on Tennessee Zone 6 200 L dropped $2.73 to $3.56.

Gas bound for New York City on Transco Zone 6 fell 6 cents to $2.73, and parcels on Tetco M-3 were off 22 cents to average $2.01.

Observers have noted that with the explosion of shale gas production from the Appalachia region along with a reconfiguration of gas flow to eastern markets, it might be worthwhile to add if not change the delivery point of futures contracts from the Henry Hub to a point more aligned with current gas flows and markets.

However, it takes more than a lot of production to set the dominant landing price, said NGI‘s Patrick Rau during a 45-minute webinar, a replay of which is available on the NGIwebsite at www.naturalgasintel.com/webinar.

The Appalachia Basin may be the mightiest natural gas producing area in the country today, but the chances that it will overtake Henry Hub as the national pricing point are “virtually nil,” said Rau, NGI’s director of strategy and research (see related story).

Little change was noted in Gulf Coast prices Wednesday for Thursday delivery. Deliveries to ANR SE added a penny to average $2.60 and the Henry Hub was flat at $2.67, and gas on Tennessee 500 L fell 2 cents to $2.63. Next-day gas at Katy was also quoted at $2.63, up a penny.

New England peak power was down, but otherwise eastern power for Thursday on-peak delivery was mixed. Intercontinental Exchange reported that on-peak power at the ISO New England’s Massachusetts Hub skidded $18.35 to $37.41/MWh and peak power at the ISO New York’s Zone A (western New York) terminal fell $2.50 to $42.17/MWh.

On-peak power at eastern New York (Zone G) added $5.50 to $36.00/MWh, and peak power at the PJM West terminal rose $1.10 to $41.77/MWh.

Cool, wet weather was forecast for Thursday. AccuWeather.com said the high Wednesday in Boston of 40 would make it to all of 41 Thursday but climb to 61 by Friday. The seasonal high in Boston is 53. New York City’s 45 Wednesday high was expected to fall to 43 Thursday before reaching 67 Friday. The seasonal high in New York City is 58.

AccuWeather.com meteorologist Kristina Pydynowski said Boston will see “a damp and chilly flow of air from the Atlantic Ocean continu[ing] through the mid-Atlantic through Thursday, spoiling baseball and other long-awaited outdoor activities.”

A Michigan marketer said warm weather next week was expected to keep requirements down. “We did buy for a couple of customers who wanted to get some extra gas in their banks, but for other customers we are looking at building up storage for the next seven months.”

Wednesday’s futures skidded, but Tuesday’s futures markets actually added ground in spite of “updated temperature forecasts that were warmer overall than a day ago, subtracting some late-season heating demand from the overall equation,” said Tim Evans of Citi Futures Perspective in closing comments Tuesday to clients.

Evans calculates a build of 7 Bcf in Thursday’s storage report and sees subsequent injections above the five-year average. “The year-on-five-year storage deficit that was 190 Bcf as of March 27 would decline to 116 Bcf on April 24, with no particular reason why the moderately bearish trend would not continue beyond that date. A declining deficit confirms the market is becoming better supplied on a seasonally adjusted basis.

“From an intermediate-term perspective, we remain open to the possibility that it may not take that much of a shift in the background fundamentals to help natural gas establish a bottom. But for the moment we don’t see any immediate fundamental trigger that would help natural gas turn the corner.”

Other estimates are a little stronger than Evans and still well ahead of last year’s 8 Bcf withdrawal and the five-year average 2 Bcf pull. IAF Advisors of Houston calculates an 11 Bcf build, and industry consultant Genscape is looking for a 15 Bcf increase. A Reuters survey of 20 traders and analysts revealed an average 11 Bcf injection with a range of +5 Bcf to +22 Bcf.

Evans is on the sidelines for the moment but suggests working a buy stop at $2.73 as a long entry in the May futures contract. He says to limit initial risk on the trade with a sell stop at $2.58.

Forecasters see a modest warming trend. In its morning six- to 10-day outlook, WSI Corp. said, “[Wednesday’s] six-10 day period forecast is generally warmer than the previous forecast over the eastern two-thirds of the nation but cooler over the West due to model trends and the day shift. As a result, period GWHDDs are down 5.5 to 33.8 for the CONUS.

“Forecast confidence is near average today based on reasonably good model agreement, even with some of the changes since yesterday. However, there are still typical technical and timing differences with a series of storm systems during the period. The Rockies and Northern Plains have a risk to the cooler side due to a potential storm system, while a backdoor cold front or onshore flow supports a risk to the cooler side into the Northeast. The southern U.S. has a slight upside risk.”