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Several Points Avoid Overall Weekend Softness

Last week's market ended quietly with anticipated declines at most points Friday as warming trends were expected to be in place by the end of the weekend in many of the areas that had been experiencing cold weather. However, flat to moderately higher numbers in several scattered instances averted a clean sweep of softening.

The drop of industrial load that accompanies a weekend market was an additional price depressant. Thursday's 10.2-cent screen uptick had essentially no cash impact.

Losses ranged from 2-3 cents to nearly 65 cents and tended to be greatest in the Midcontinent and Rockies. The minority cases of firmness ran as high as a little more than a dime and were most prominent in the Pacific Northwest and Western Canada.

Except at Texas points, Gulf Coast declines were generally fairly moderate (and Henry Hub even rose about a dime) with freeze warnings extending through Saturday in the eastern end of the South and 40s lows likely at the western end. Frigid conditions also would remain in the Midwest and Northeast, but the entire eastern half of the U.S. was expected to see milder weather start arriving Sunday.

Most of the West was already experiencing a moderating climate that was choking off gas demand to such a degree that both of California's giant distributors had high-linepack OFOs in place for at least Saturday (see Transportation Notes). The lack of California buying was especially felt in the Rockies and San Juan Basin.

However, despite PG&E's OFO, Malin managed to advance about a nickel, while the PG&E citygate saw only a modest drop of the same amount. The SoCalGas OFO had a much greater impact on border pricing, which dropped a little more than 40 cents.

The main weather story in the West was a series of Pacific storms inundating the Pacific Northwest that was expected to continue through most of this week. But except for mountain snows, the storms were creating little in the way of heating load.

Instead, it was a rather severe case of low linepack on Northwest Pipeline, especially north of Kemmerer (WY) Station, that resulted in price gains at Pacific Northwest points (Sumas, Stanfield and Kingsgate) and in Western Canada (Westcoast Station 2 and NOVA Inventory Transfer).

It's not all that cold in the Pacific Northwest, said a regional utility buyer. But area trading points were defying the general market softness because of recent heavy drafting on Northwest (see Transportation Notes), she said. Buyers were making extra gas purchases to resolve negative imbalances and avoid being the target of a customer-specific entitlement by the pipeline, she added.

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