As a couple of sources had predicted the day before, the cash market remained close to unchanged Thursday in most cases. Freezing lows forecast for Friday morning in much of the East, even into the Deep South, were augmented by Wednesday's screen rebound in being responsible for modest gains at a majority of points.
As they had on Monday, the Rockies constituted the odd market out in seeing much lower prices, although the declines were considerably smaller this time. They ranged from about 40 cents on Questar to a dollar each for Cheyenne Hub and Northwest-South of Green River. Otherwise, price drops were limited to a little less than 20 cents and were most frequent in the West.
The rest of the market was flat to about 20 cents higher, with Chicago citygates and Alliance in the Midwest leading the firmness.
The Energy Information Administration was close to the high end of prior expectations in announcing a storage injection of 58 Bcf for the week ending March 30. Analysts had cautioned that a bearish build was already factored into Nymex trader psychology, and they proved to be correct. Instead of focusing on the new increase in the surplus over the five-year average inventory, the traders were more interested in predictions that unusually cold weather will remain in the East through next week in sending May futures 9.2 cents higher.
Whereas the East will continue to shiver, it's getting warmer in most of the West. Only the Rockies was expected to keep seeing frigid temperatures and some snow. The Southwest was already on the very warm side (Phoenix was expected to see another in a succession of highs in the low 90s Friday) while the Pacific Northwest was starting to see temperatures rise into the 60s and 70s.
The weakness of heating load in so much of the West was exacerbated by PG&E's issuance of a systemwide high-linepack OFO for Friday (see Transportation Notes).
A Midwestern utility buyer said his company had seen a "big-time increase" in throughput now that much colder weather had arrived (his city was due to record a low around 20 degrees Friday). "People got spoiled by those moderate conditions near the end of March," he said, and that's made them even more disappointed by the return of winter weather in early April. Prices were up to a dime higher on Northern Natural Gas, but the buyer reported having no problem finding supplies. It should start turning a "little warmer" towards the end of the weekend, he said.
Much of the industry is taking off for Good Friday, and the buyer said he also will take the day off but the rest of his company will be working.
A marketer in the Upper Midwest was evidently distraught upon answering the phone. "It's been a long day, and winter has returned" with a vengeance, she said. There was ice on the streets and she witnessed quite a few vehicles (including her own at one point) fishtailing on the slippery surface while driving to the office. The marketer, who also said she would be working Friday, reported buying Michigan citygate packages at $7.69-70. Referring to the screen rise, she said she guessed that futures traders decided cold weather in the East was more persuasive than a bearish storage report.
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