Northeast citygates continued to slide moderately Thursday as a slow warming trend in the region proceeded, but all other points ranged from flat to 32 cents higher. Declines about midway between a dime and 15 cents at Tennessee Zone 6 and Transco Zone 6-New York City topped the losses.
The gains were largely attributable to the return or continuation of colder weather in the Midwest and the northern two-thirds of the West, along with an early-season surge of buying for storage use. Forecasts of highs around 80 degrees or more in the South indicated that air conditioning load also contributed to overall demand.
An essentially flat May futures contract Wednesday provided no guidance for Thursday's cash quotes, but the screen drop of nearly a dime Thursday hints at lower numbers Friday in the physical market.
The Chicago citygate led the overall ascent Thursday, and that was hardly surprising with a sub-freezing low predicted for Friday in the Windy City. All of the Midwest and most of the Midcontinent made strong price showings as a storm system is due to move eastward from the Rockies into both regions Friday. The Great Lakes area will not get above the 30s Friday afternoon, according to The Weather Channel (TWC).
Northeast temperatures are expected to inch a little higher Friday, but regional quotes could rally slightly that day with a cold front predicted to move in Saturday. The South will continue to bask in near-summer-like warmth, with highs in the 80s ranging all the way from Virginia to Texas and readings in the 90s due in deep South Texas, TWC said.
More of the same is the prognosis for western weather: temperatures below seasonal norms in much of the region and mountain-area snowfalls. However, with a huge storm moving eastward from the Rockies, a build-up of high pressure will bring warmer conditions Saturday to the Intermountain West, TWC said.
The Energy Information Administration's estimate of a 10 Bcf storage withdrawal for the week ending March 31 was within the range of prior expectations but was only about half as large as consensus guesses centered around 20 Bcf or so. Although a small pull had been anticipated, Nymex traders treated the report as modestly bearish and sent May futures to a 9.7-cent loss on the day. Only the East region was still actively taking gas (15 Bcf) out of the ground; the West and Producing regions recorded net injections of 2 Bcf and 3 Bcf respectively.
It's likely to be the last withdrawal of the year until the next heating season begins. According to estimations by Bentek Energy of Golden, CO, through Thursday of the current week a total of 17.7 Bcf had been injected, with even the East region seeing a build of 4.7 Bcf.
A trader who markets gas on behalf of several independent Gulf Coast producers commented that even though the Nymex strip is indicating that the cheapest gas for refilling storage is now rather than later, "I think I'd be pacing myself on storage injections." Unless a hurricane comes along to disrupt offshore production again, there's nothing else in sight at this point to support prices, she said. She surmised there probably will be some people who regret not waiting until around the end of summer to top off their storage accounts, because she expects prices to drop rapidly then as facilities start filling up.
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