Except for an enclave of still-rising points in the New England market, the latest cold spell wasn't any more successful in sustaining a price rally than others in recent weeks have been. Modest warming trends in the Midwest and lower Northeast/Mid-Atlantic, along with a plunge of 20.6 cents by December futures a day earlier, pushed a large majority of points lower by double-digit amounts Tuesday.
Even though overnight lows in New England were forecast to stay a few degrees above freezing, that was where all of Tuesday's upticks from about 15 cents to 20 cents or so occurred. Otherwise, losses ranged from a couple of pennies to nearly a quarter.
The screen will chip in with some prior-day support for Wednesday's cash trading, but it won't be much after prompt-month futures recovered only partially from Monday's dive in rebounding by 3.8 cents Tuesday (see related story).
The South as far west as Texas and parts of the Rockies are among the few areas where temperatures will continue to drop a bit further Wednesday, and even that won't be true universally, as New Orleans is expected to see its Tuesday high of 75 ease upward by a couple of degrees Wednesday. Much of the Midwest and Northeast will realize increases of two to four degrees or so, although some sections will essentially remain unchanged. A few locations such as Miami in Florida and Los Angeles, San Diego and Phoenix in the southwest corner of the U.S. will be downright warm with highs from the mid 80s to around 90.
Tropical Storm Tomas was forecast to strengthen and was still moving westward Tuesday afternoon, but its primary menace was to Haiti and possibly eastern sections of Jamaica and Cuba. The 2010 Atlantic hurricane season continued to spare Gulf of Mexico production of any problems as Tomas was projected to eventually turn back more to the north.
Although PG&E is ending a high-inventory OFO Wednesday, numbers at Malin and the PG&E citygate fell about 15 cents each.
Tennessee lifted an OFO Action Alert for the remainder of its system (see Transportation Notes), and thanks to upper New England chill, Tennessee Zone 6 (200 Leg) was one of the rare points to see a strong gain of about 20 cents, IntercontinentalExchange (ICE) said. But volumes at the point on ICE's online trading platform slipped a bit form 165,200 MMBtu Monday to 156,800 MMBtu Tuesday. However, Algonquin citygates recorded an even stronger increase of a little more than a quarter, and its activity on ICE jumped from 89,900 MMBtu to 121,300 MMBtu over the same two-day period.
Meanwhile, near the southern end of the Northeast Transco's Zone 6-New York pool dropped nearly 20 cents, but its ICE volumes rose from 174,000 MMBtu to 197,600 MMBtu.
It was only by small amounts, said a Gulf Coast trader, but she perceived cash prices in her region as tending to slip a bit further as trading went on. Despite the small screen rebound, she expects softer physical quotes again Wednesday, primarily due a general lack of cold weather. It seems like an occasional spurt of colder weather fizzles out quickly and prices immediately start to move lower again, she said.
A marketer in the Upper Midwest said it's just enough on the chilly side to spur a little space heating demand, but there's no doubt that fall is still around and winter is still quite a ways off. For now, everything is looking quiet for her company until "serious" winter arrives.
Noting that MichCon is extending storage injection restrictions into November for the first year that she can remember, the marketer said that normally wouldn't mean much because withdrawals would be starting soon, but the delayed start of really cold weather probably means the utility's customers likely preferred to have kept all their injection options open.
Bentek Energy's U.S. Natural Gas Hub Flows chart found mostly moderate gains in nominated volumes for Tuesday at the 23 trading points it covers. Although fewer in number, the declining locations saw the biggest change of 48% (down 179,000 MMBtu to 197,000 MMBtu) at Tennessee Zone 0, Bentek said. Niagara recorded the biggest percentage gain in rising 20,000 MMBtu to 94,000 MMBtu (27%), but in pure volume terms Northern Natural-Ventura led with an increase of 169,000 MMBtu to 954,000 MMBtu (22%).
Strategic Energy & Economic Research's Ron Denhardt said his final estimate of the storage injection for the week ending Oct. 29 is 58 Bcf -- unchanged from his "early" estimate. Stephen Smith of Stephen Smith Energy Associates is now projecting a build of 61 Bcf, which he said replaces his original estimate of 67 Bcf. IAF Advisors analyst Kyle Cooper anticipates a 57 Bcf addition being reported.
©Copyright 2010 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.