The cash market had an abundance of supportive factors on which to base gains across the board Thursday: cold weather returning to northern market areas and continuing in the Rockies; developing cooling load from 80s highs in much of the South and Southwest; the previous day's 35.9-cent spike by May futures; and Gulf Coast supply tightness as a result of the Independence Hub outage (see Daily GPI, April 10).
Storage injection purchases likely are also contributing to this week's ongoing market bullishness, as many perceive that last week marked the last net withdrawal of the year until around November.
Westcoast Station 2's uptick of only a couple of pennies and a nickel gain at Sumas made them the only points failing to achieve double-digit gains. Otherwise, increases ranged from about a dime to around 45 cents and were fairly evenly distributed among geographic market areas.
Usually $10-plus price territory is reserved for Northeast (and occasionally Midwest) citygates. But with Thursday's gains most Gulf Coast points also were sporting quadruple-digit averages. And Henry Hub was in the relatively uncommon position of trading at a premium to prompt-month futures.
The Energy Information Administration's report of a 14 Bcf withdrawal from storage during the week ending April 4 dovetailed nicely with consensus expectations in the low to mid teens Bcf. The pull was clearly bullish in comparison with injections of 33 Bcf a year ago and 15 Bcf in the five-year average. But Nymex traders allowed a sizeable advance in prompt-month futures to keep dwindling into the afternoon and even venture into the red for a while before finally eking out an uptick of 4.2 cents.
The Florida citygate and Florida Gas Zone 3 easily qualified for the day's two biggest increases after hot weather forecasts in its market area prompted Florida Gas Transmission to issue an Overage Alert Day (see Transportation Notes).
PG&E not only is ending a systemwide low-inventory OFO Friday, but reflecting a warming trend in its Northern California service territory, the giant dual utility projected that linepack on its California Gas Transmission system will rise above maximum target levels by Sunday. That could lead to the issuance of a high-inventory OFO.
The relative weakness of Sumas and Westcoast Station 2 quotes is linked to Northwest Pipeline ending a Declared Deficiency Period for Burley Compressor Station and the Muddy Creek North constraint point Friday (see Transportation Notes).
After midweek flirtations with milder temperatures, the Midwest and Northeast are starting a temporary retreat into conditions more resembling winter than spring. The Weather Channel (TWC) had a grim Friday forecast for a large section of the Midwest: "Heavy, wind-driven snow, producing blizzard conditions at times, will fall across northern Nebraska, the eastern sections of South Dakota and North Dakota, much of Minnesota [and] the northern counties of Wisconsin and Upper Michigan." And on Saturday snow will continue over the northern Mississippi Valley and northern Great Lakes, the forecasting service added. However, a moderating trend is expected to set in toward the end of the weekend.
Conditions will be a little milder than that, albeit chilly, through Saturday in the Northeast, but temperatures will be well below average Sunday, Monday and Tuesday before returning to near average in the middle of next week, TWC said. "Monday could be the coldest day with highs in the 30s across northern New England, upstate New York and southward along the spine of the Appalachians..." it added.
Although the South will feel some early summer-like heat Friday, it will be short-lived as a cold front begins to approach the region later that day. Behind the front will be cold and blustery conditions for mid-April, according to TWC. However, that region also will begin returning to more normal weather at midweek.
It seems like winter-like weather hardly ever left the Rockies, but most of the rest of the West will be cool to warm into the weekend.
The bulletin board of Northern Natural Gas provided an indication of the below-normal temperatures returning to the Midwest. A posting noted that the pipeline's normal system weighted temperature at this time of year is 44 degrees, but it was projected that the system would average 34 Thursday, 31 Friday, 32 Saturday and 37 Sunday.
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