Fall may have officially begun a day earlier, but with parts of the Northeast joining the South and desert Southwest in conditions that felt more like summer, prices continued to rise at nearly all points Thursday. The cash market got an additional boost from Wednesday's 4.7-cent gain by October futures, and a concern about the pending formation of a new tropical storm in the Caribbean likely played a role.
Losses of 2-4 cents or so at a couple of points were the only exceptions to quotes ranging from flat to about a quarter higher.
The Rockies, which had been the weakest market area on the previous day, put on a show of strength Thursday in recording all of the largest gains. The CIG-Henry Hub basis spread, which had grown to 75 cents Wednesday, tightened greatly to the 60-cent area Thursday.
Western Canada and a couple of Northeast locations were also strong in seeing upticks of about a dime or slightly more.
The Energy Information Administration estimated the storage injection for the week ending Sept. 17 at 73 Bcf, which was significantly below consensus expectations in the upper 70s Bcf (see related story). Nymex traders perceived a mildly bullish tint in the report as they pushed prompt-month futures 5.3 cents higher, extending prior-day screen support for the cash market by at least another day.
Despite the below-expectations addition, one source suggested that storage buying continues to be a factor in keeping the market fairly firm in recent weeks in the face of ostensibly bearish weather.
A lot of recent market talk has focused on storage facilities getting filled soon, but Southern belied that assumption to some extent. As of Sept. 16 it had 50.2 Bcf, or 84% of total working gas capacity, stashed in its two storage fields in Louisiana and Mississippi, the pipeline said. That was well behind the Sept. 17, 2009 injection pace of 57.8 Bcf (96%), but ahead of the 46.9 Bcf (78%) volume on Sept. 18, 2008.
After starting the day as still a low-pressure area in the central Caribbean Sea, the system became Tropical Depression 15 and rapidly advanced from there to Tropical Storm Matthew, the 13th named storm of the Atlantic season. Although still projected as aiming at Central America south of the Yucatan Peninsula, tracking models left some leeway for Matthew to veer to the northwest toward the western Gulf of Mexico.
Former Tropical Storm Lisa weakened back to a tropical depression and still had not moved very far (340 miles) west of the Cape Verde Islands, the National Hurricane Center said. Lisa was considered unlikely to reach the North American continent.
The Northeast is feeling a little post-summer heat as forecast highs for Friday from the mid 80s to around 90 extended from Philadelphia and New York City into much of New England. Boston's expected jump from a 71 peak Thursday to 85 Friday represents a massive and rapid warm-up for that city.
Highs in the southern U.S. will range from around 90 to the mid 90s through Texas, and Phoenix will be approaching 100 again. However, the Midcontinent is cooling off, with Oklahoma City not expected to surpass 84.
An eastward-advancing front will create a contrast in Midwest conditions. While Chicago will be decidedly on the cool side in topping out around 70 Friday, over in Cleveland a retreat of a couple of degrees will still leave the high in the upper 80s. Meanwhile, Canada and the rest of the U.S. remain mild to chilly.
The PG&E citygate rebounded by more than a nickel after the giant combination utility ended a high-inventory OFO (see Transportation Notes), said IntercontinentalExchange (ICE), but volumes traded on its online platform barely budged, increasing almost imperceptibly from 711,100 MMBtu Wednesday to 712,200 MMBtu Thursday.
Both price and volumes into Columbia Gas (TCO) rose substantially, according to ICE. TCO trading activity soared from 896,900 MMBtu Wednesday to 1,032,100 MMBtu Thursday while the average price was up about 8 cents, ICE said.
The Houston Ship Channel, where prices gained about a nickel, also saw a significant jump in ICE volumes from 638,900 MMBtu Wednesday to 824,500 MMBtu Thursday as Texas heat and humidity, while not as severe as in August, remained at fairly strong levels.
MichCon was the big volume gainer Thursday, as Bentek Energy's U.S. Natural Gas Hub Flows chart reported that nominations there increased by 150,000 MMBtu (16%) to 1,110,000 MMBtu.
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