Prices dropped again at nearly all points Thursday as normal to above-normal temperatures in many areas and prior-day futures weakness continued to weigh on the cash market. As on Wednesday, though, there were a few flat to about a dime higher points that kept price movement direction from being universal.
Thursday's losses were less than those on Wednesday in most cases. They ranged from a couple of pennies at three Midcontinent points to about a quarter at Dracut in the Northeast.
With a number of buyers having to reduce their storage accounts to certain levels by the end of March, there is no doubt that use of storage gas is supplanting purchases of new production in some cases.
The South, which has seen primarily spring-like weather in the last week or so, will be contributing some additional heating load this weekend as "much colder air" moves in Saturday, The Weather Channel (TWC) said. This could even involve sleet in North Texas and North Louisiana Saturday and snow showers in the southern Appalachians Sunday, the forecaster added.
Snow will also be a feature of Friday's weather in the Midwest from the Dakotas to Michigan. The snowfall will be lessening Friday, only to be replaced by a strong cold front and clipper low-pressure system approaching from central Canada, according to TWC. The cold front and clipper system are due to be invading the Northeast on Monday. Meanwhile, snow will continue in elevated areas of the West through Saturday, but Southern California will be quite warm this weekend with highs topping out in the 70s and low 80s.
The Energy Information Administration was within the range of prior expectations in reporting a 132 Bcf storage withdrawal for the week ending Feb. 23, but fell short of consensus estimates centered around 140 Bcf. Nevertheless, Nymex traders took an April futures contract that had spent the morning in negative territory to a few pennies higher briefly in the afternoon before allowing it to close the day down 1.2 cents.
Kern River continued to have problems with linepack shortfalls. Despite a Wednesday bulletin board posting about low linepack (see Daily GPI, March 1), "supply shortages and drafting by delivery point operators continued [Thursday], causing linepack to decrease by approximately 60,000 Dth, or a total of approximately 170,000 Dth over the past two days," the pipeline said. At any delivery point where drafting occurred during Thursday's gas day, Kern River said, it will reduce physical flow to that point in Friday's Intraday 1 nomination cycle by the quantity that was drafted Thursday. Even with tight supplies, Kern River prices fell about a dime.
The PG&E citygate was down about 20 cents despite the utility's California Gas Transmission system ending Friday a two-day customer-specific low-linepack OFO.
Columbia Gas (TCO) took a tremendous hit on system throughput for Thursday's gas day, according to Bentek Energy's analysis of flows at 23 trading hubs (http://intelligencepress.com/features/bentek/). Nominated volumes for Thursday on TCO were 1,468,000 MMBtu/d, a whopping 1,238 MMBtu/d (or 46%) below the previous day's nominations, Bentek said. TCO prices fell about 15 cents Thursday after dropping 20 cents Wednesday.
A Texas-based marketer said trading appears to have entered a "doldrums" period. As another source had said Wednesday, the marketer agreed that the cash market likely will be quiet and feature relatively little volatility through the rest of March unless an unexpected weather event occurs. He reported seeing less and less heating load in many areas as the week went on. However, he said, there is "heavy snow" occurring Thursday and Friday around the Minneapolis-St. Paul area, which constitutes a hefty chunk of Northern Natural's market demand. That's why Thursday's losses at Northern Natural-demarc and Ventura were pretty small, he said.
It been snowing almost continuously since Monday in the Calgary area, but a warm-up is just around the corner, said a local producer. Highs will go from around minus 7 degrees Celsius (about 18 degrees Fahrenheit) Thursday to plus 10 C (about 50 F) on Saturday, she said.
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