Prices rose again at nearly all points Thursday, but it seemed increasingly likely that the current week will not run the table with firming numbers. Several flat to a couple of cents lower locations broke the preceding string of flat to higher quotes across the board; except in the Northeast, Thursday's gains were considerably smaller than those preceding them; and -- again except in the Northeast -- modest warming trends were returning several areas to fall-like conditions after a temporary touch of winter.
Most of the market was up 2-3 cents to about half a dollar, although all but one gain peaked around 35 cents. As on the day before, the bulk of the larger increases occurred in the Northeast.
The report of a 3 Bcf storage injection during the week ending Nov. 12 by the Energy Information Administration was slightly below consensus estimates that centered around 5-6 Bcf. Although the report was nominally bullish in relation to expectations, the fact that yet another record level of inventory was reached may have been responsible for a follow-up selling binge by Nymex traders, but eventually they bid prompt-month futures back up to a loss of only 2.3 cents lower on the day (see related story).
Despite a net build, Southern showed the contribution of its customers to the East Region's 8 Bcf pull. The pipeline said that as of Thursday, Nov. 11 volumes at its two storage fields stood at 55.9 Bcf, or 93% of 60.0 Bcf in total working gas capacity. That represented a retreat from the peak of 56.8 Bcf (95%) reached a week earlier (Nov. 4), Southern said. Its most recent inventory level matches the 55.9 Bcf (93%) on Nov. 12, 2009 and compares with 55.5 Bcf (92%) on Nov. 13, 2008.
Alberta was still flirting with lows around zero, but in the U.S. the Northeast was one of the rare areas where temperatures would still be dropping Friday. Most of the rest of the nation would return to merely chilly instead of near-frigid.
Despite the remaining widespread cold weather, transportation constraints were relatively few and far between. However, at opposite corners of the U.S. pipelines reported problems with low linepack. Citing high system demand, Algonquin said it was requiring shippers to either stay strictly in balance or run positive imbalances until further notice. And in the Southwest Transwestern issued a low linepack Alert Day for Friday in its West of Thoreau area. Transwestern said it was utilizing an Alert Day rather than an OFO because the low linepack condition "is not attributable to performance of particular receipt or delivery points."
One of the signs of moderating weather trends, besides Thursday's dwindling cash gains, was relatively little upward movement in volumes at many points traded on IntercontinentalExchange (ICE). One of the larger increases was at the Algonquin citygate, where New England lows are frequently around freezing or not much higher. The citygate, up a little more than a quarter, saw activity rise from 113,400 MMBtu Wednesday to 197,800 MMBtu Thursday, ICE said. Another sizeable jump occurred at the Chicago citygate, where although the peak temperature was expected to go up about 15 degrees Thursday pricing was up nearly 20 cents and volumes soared from 773,500 MMBtu to 876,100 MMBtu.
However, after seeing ICE volumes skyrocket to 451,600 MMBtu a day earlier, the Houston Ship Channel dropped back to 343,000 MMBtu Thursday. And with an uptick of not quite 2 cents, ANR-Southwest retreated from 97,100 MMBtu to 72,700 MMBtu.
With highs in the low 70s due to return by this weekend, a utility buyer in the South said his company is glad it left a "hole" in storage accounts so it can start injecting again instead of having to dispose of unneeded supply. In recent weeks the utility has been switching back and forth every few days between withdrawals and injections, he said, although on balance there have been more pulls.
Pretty soon there won't be any such cycles, he said, because "it will be cold practically all the time and we'll just be withdrawing."
A Midwest utility source said she was glad to be leaving the area's brief spell of winter-like conditions behind. It wasn't too bad, she added; there was no heavy frost, just freezing lows overnight. Even with slightly milder weather, nearly everyone still has the furnace going anyway, she said.
The utility's gas throughput is currently pretty good, she said, but water sales are on the low side.
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