With some support from the previous day's 9.7-cent rebound by October futures, warming trends in parts of the key Midwest and Northeast market areas propelled cash prices higher at a large majority of points Wednesday.
Flat to as much as 20 cents higher numbers were dominant; double-digit gains were scattered geographically but tended to be concentrated at Northeast delivery points where temperatures were rising into the mid 80s or slightly higher. Losses ranging from a couple of pennies to nearly 15 cents were most frequent in the Rockies.
It won't be as much as before, but screen support will continue for Thursday's cash market as the prompt-month October futures contract rose another 4.7 cents (see related story).
The fall season officially began Wednesday, but those types of weather conditions have been inhabiting much of the North American market for something like a month or so. However, the Midwest and Northeast have begun seeing many locations peaking in the mid to upper 80s again. Granted, that's not a heat wave, but it's considerably warmer than what the regions had been experiencing in recent weeks.
Meanwhile, although highs in the South will remain on either side of 90 for the most part Thursday, a few locations such as Memphis, TN are expected to continue approaching 100. But the status quo of moderate to cool will prevail in most of the West and Canada.
As expected, Hurricane Igor disappeared from the National Hurricane Center's (NHC) Atlantic map. NHC slightly raised the chances of a low-pressure area (which might become Matthew) over the south-central Caribbean Sea becoming a tropical cyclone in the following 48 hours from 50% to 60%, but expected it to stay in the area of northern South America and lower Central America in the near term. Tropical Storm Lisa was moving very slowly and remained remote in the eastern Atlantic.
IntercontinentalExchange (ICE) found transaction volume on its platform at Transco Zone 6's non-New York pool nearly doubling from 62,800 MMBtu Tuesday to 117,900 MMBtu Wednesday while the price rose nearly a dime. Similarly, ICE's Henry Hub activity jumped from 463,000 MMBtu to 695,300 MMBtu as the point saw a gain of a little more than a nickel.
The PG&E citygate was down only a couple of cents and Malin was up by a similar amount despite PG&E extending a high-inventory OFO -- declared belatedly for Wednesday -- through at least Thursday (see Transportation Notes). ICE found little change in trading volumes at either point: down from 726,600 MMBtu Tuesday to 711,000 MMBtu Wednesday at the citygate and a drop from 457,900 MMBtu to 411,700 MMBtu at Malin.
Noting that September is typically one of his company's lowest-demand months of the year, a Lower Midwest utility buyer said nevertheless there was a little more power generation load than usual because it was "kind of warm" for September.
The buyer said he was making a few early October baseload deals for index flat to plus 0.5 cent at both the Ventura and demarc locations on Northern Natural Gas.
Local weather is "reasonable," said a marketer in the Upper Midwest, adding that her company is still buying a little bit of spot gas for clients each day, but their demands are light. Referring to the system in the Caribbean Sea, she said she could only guess that "storm hype" helped raise both cash and futures prices Wednesday.
There's plenty of capacity available for Kern River deliveries into the SoCalGas system. Kern River said only 214,244 Dth was scheduled Wednesday at Wheeler Ridge, leaving 670,756 Dth available; the comparable numbers at Kramer Junction were 341,285 Dth and 208,715 Dth.
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