With heating load continuing to dwindle, and the decline of industrial load over a weekend coming into play, prices fell at nearly all points Friday. A few scattered flat to a little more than a nickel higher locations averted a clean sweep of softening.
The majority declines ranged from a couple of pennies to about 55 cents, and were spread fairly evenly through the various geographic market areas.
New York City was forecast to hit 71 degrees Saturday, a clear signal that the Northeast's winter storm seige that started the previous weekend was over and more seasonable temperatures had arrived. There were similar predictions of highs in the vicinity of 70 in the Midwest. The eastern end of the South was still fairly mild, but forecasts of highs on either side of 80 at the western end may have generated enough cooling load to keep Gulf Coast prices from falling even further.
The last bastion of seriously cold weather is the mountainous sections of the West, where the Sierras could get hit with more than a foot of new snow over the weekend, The Weather Channel said. However, the affected areas have relatively sparse populations, so gas demand doesn't get a significant boost as a result. Calgary had seen snow in the last couple of days, a producer reported, and couldn't expect a substantive warm-up until around next Tuesday.
There was a rumor going around Friday of a possible revision to storage data, but it couldn't be confirmed, a marketer said. Another source said he was hearing that the higher-than-expected withdrawal reported Thursday might have been related to Columbia's Hardy storage field starting operations this month, but there was no word of a potential revision.
Last week's Vector outage had ended, a Western Canada producer said, so suppliers had expanded options on taking gas elsewhere from Chicago. The citygate fell about 20 cents Friday. He expected the general market softness to continue this week due to mild weather forecasts and renewed weakness by May futures, which fell a little more than a dime Friday.
Reports of index premiums for May continued. The producer said he was hearing Chicago basis at minus 22-23 cents, and said the citygate was being traded at the NGI index plus 1-3 cents. Storage injection buying should be strong in May, since April was much colder than people expected, he added. However, as it continues to get warmer, overall demand may not be very strong, he said.
Until the market sees significantly hotter weather, a Texas-based marketer expects it to stay soft in the interim. However, maybe a geopolitically motivated big jump in oil markets might carry over into gas, he speculated. He agreed with the producer about Chicago basis for May, but suggested that it might be getting weaker because he saw Chicago trade as low as minus 25 cents basis on ICE Friday afternoon.
The Upper Midwest is getting warmer even faster than she expected, said a marketer who reported her city up into the 70s Friday and said it "may be pushing 80" by Sunday. Her company hopes that spring has finally sprung for good, because "it's been a wretchedly cold" first half of April. It also is hopeful that softer prices will continue into bidweek, she said, adding that the company's customers haven't needed much gas lately and "we should be able to get cheaper gas for May."
Bentek Energy provided an indication of how much gas demand was slipping in the Midwest at the end of the week. Its analysis of U.S. Natural Gas Hub Flows (http://intelligencepress.com/features/bentek/) showed that nominated volumes for Friday at the Chicago citygate fell by a whopping 377,000 MMBtu/d, or 17%. MichCon nominations also fell by 17%, Bentek said, but in that case the drop was only by 81,000 MMBtu/d.
Following a week in which the number of drilling rigs searching for gas in the U.S. saw a huge jump of 34 to 1,472, Baker Hughes said only one got added to the tally in the week ending April 20 (http://intelligencepress.com/features/bakerhughes/). The number of gas-seeking rigs in the Gulf of Mexico was unchanged at 75, Baker Hughes said.
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