With heating load continuing to dwindle in most areas of the U.S. and Eastern Canada, even the support from a prior-day April futures increase of 13 cents was unable to prevent cash prices from dropping at nearly all points Wednesday. Although the region was still digging out from an early-week snowstorm, the prospect of warmer temperatures Thursday resulted in Northeast citygate plunges continuing to lead overall declines.
Only four flat to barely higher points -- three of them in the West -- avoided the increasing weakness of the spot market. Losses ranged from 2-3 cents to a little more than $4.10. Transco Zone 5 in the Mid-Atlantic joined Northeast citygates in recording all of the triple-digit dives.
Although prior-day screen support had no discernible impact on Wednesday's cash market, the support will be there again Thursday after the April contract eked out a late gain of 5.8 cents after spending most of Wednesday in negative territory (see related story).
PG&E's issuance of a customer-specific low-inventory OFO failed to prevent the PG&E citygate from falling about a nickel, while Florida Gas Transmission's ending of an Overage Alert Day resulted in declines of about a quarter, 30 cents and 40 cents at Florida Gas Zones 2 and 3 and the Florida citygate, respectively (see Transportation Notes).
With lows in the teens for the past two days, New York City residents are certain to welcome Thursday's predicted low around freezing. However, Boston could still expect a sub-freezing low in the mid 20s, according to the Weather Central forecasting firm. Overall, the region will continue warming through most of Thursday before an icy blast begins returning late that night, The Weather Channel (TWC) said.
A warming trend also will continue in the Midwest, with most of the region expected to stay above freezing Thursday.
Many Southern utilities are experiencing "in-between" weather, which means light gas throughput (and thus lower revenues) for them -- that is, lows from the mid 50s to low 60s that induce little furnace use, and pleasant highs in the 70s that are similarly limited in getting residents to turn on their air conditioners.
The West's coldest weather will remain in the mountain regions, although a new cold front is due to move into the Pacific Northwest from Canada late Thursday, TWC said.
AccuWeather.com meteorologist Joe Bastardi said a combination of factors will result in warmer weather for the East and South in the near future. "Arctic high pressure will move off the coast, while strong March sunshine goes to work on the snowpack," he said in a Wednesday advisory. "Take away the arctic air and melt the snow, [and] it should feel more like springtime later in the week into the weekend. Enjoy, but don't get used to it!" Computer models are hinting at a seesaw weather pattern through the first part of April, Bastardi said.
There's still a little snow on the ground locally, a Midwestern marketer reported, "but at least we're staying above freezing" for a change. Prices got a little stronger near the end of trading Wednesday, at least in the Midcontinent, but not by much. He estimated late numbers being about 3-5 cents higher than before, and said he suspected that traders making up short imbalances may have been responsible.
The marketer expects softer prices again Thursday, but said a small rally at some points is possible Friday because of colder weekend forecasts. The only transport issue of concern to his company currently is Rockies Express "having a little problem" delivering into ANR.
For the second week in a row the National Weather Service revised its initial six- to 10-day forecast for the March 9-13 workweek (see Daily GPI, March 4), now calling for more cold and less warmth. As of Wednesday morning the agency was predicting below-normal temperatures everywhere west of a line running southward from central Wisconsin to the northwest corner of Arkansas before curving to the southwest through central Texas. The area in which NWS expects above-normal readings has shrunk to everywhere east of a line curving generally southwestward from Connecticut and southeastern New York to southeastern Louisiana.
SunTrust Robinson Humphrey analyst Cameron Horwitz said he looks for a 102 Bcf storage withdrawal to be reported for the week ending Feb. 27. Bentek Energy also projects a pull of 102 Bcf, which it said would bring stocks to 1,793 Bcf. with only a month left in the traditional withdrawal season. Bentek expects draws of 80 Bcf, 19 Bcf and 3 Bcf in the East, Producing and West regions, respectively.
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