Daily GPI / NGI All News Access

Northeast Keeps Plunging, Leads Overall Market Lower

Northeast Keeps Plunging, Leads Overall Market Lower

The cash market was predictably weaker Friday, with continuing triple-digit and quadruple-digit plunges at Northeast citygates leading the trek downward. Non-Northeast losses were as small as a nickel, but mostly ranged between 20 and 90 cents.

Prospects for a respite from the Northeast's recent brutally harsh cold, generally mild weather for mid-winter across the southern U.S., and a long holiday weekend combined to push prices lower.

Things had calmed down quite a bit since midweek, said a Northeast marketer in classic understatement. There was still a lot of intraday demand as sub-zero temperatures lingered in some areas Friday, but weekend loads were considerably less heavy, he said. Northeast prices have come back down a long way, he observed, "but we've still got those big spreads of $3-4" from the Gulf Coast to the citygate. Hydro-Quebec had joined New England utilities in appealing for energy conservation Thursday but was no longer doing so Friday, indicating that the worst was over in eastern Canada, the marketer said.

Although Northeast weather will see some moderation from last week's brutal conditions, forecasts have regional temperatures remaining up to 10 degrees below normal, one source pointed out. So demand will decline but still be strong, he said.

Weather 2000 concurred, saying more polar and arctic air is on the way and it could affect the Midwest more severely than last week. The consulting firm noted Friday that it had previously advised clients "that the Polar Vortex would need time to recharge before delivering more bouts of polar and arctic air. We are now seeing signs that this is to start happening sooner rather than later...The uncertainty beyond seven days is how far south and west this cold air gets delivered, and whether it is polar (below normal) or arctic (much below normal) in nature. It is likely that Midwest locations, including the western Great Lakes and Upper Plains, will begin to see cold win out more than warm in the weeks ahead, as the penetration point for these cold blasts shifts westward."

With temperatures approaching 40 degrees F. Friday, "it's almost like a heat wave for us" in the middle of January, a Calgary-based producer said. His company was continuing to largely shun the California market for the time being and flowing as much of its gas as possible to eastern Canada and the U.S. Northeast, he said. The profit margins had fallen off since midweek, the producer said, but they were still able to make "good money" at Friday's market-area levels.

Prices tended to rise near deadline, said a Midcontinent/Southwest trader who quoted Waha in the high $4.90s early but reported a late package about 20 cents higher. Other than the modest late rebound, the market closed out the week on a quiet note, she said.

Analyst Kyle Cooper of Citigroup said his initial estimation for this week's storage report looks for a withdrawal in the 180s Bcf. This would compare with year-ago and five-year average figures of 219 Bcf and 146 Bcf.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus