All but a few locations retreated Tuesday from the previous day's overall strong gains despite falling temperature forecasts for much of the Midwest and South. They appeared to be outweighed by significant warming trends in the Northeast, Midcontinent, Rockies and desert Southwest. There was an additional bearish factor in Monday's 18.9-cent plunge by January futures.
The Florida citygate rose about 15 cents, spurred by a warning of a potential Overage Alert Day by Florida Gas Transmission due to forecasts of near-freezing weather moving into northern Florida by Wednesday night. Other exceptions to the general softness were flat to up a little more than a dime.
New England citygates were far out in front of losses ranging from 2-3 cents to nearly 85 cents. The Midcontinent/Midwest and Rockies also were prominent in the softness category.
January futures wavered to either side of flat in early trading before eventually settling for a daily loss of 3 cents (see related story).
New England continues to be much milder than usual for this time of year, while the lower Northeast and much of the West are returning to fairly moderate conditions. The Midwest and South are the current focus of heating load needs, but neither is seeing severe cold at this point.
Transwestern continued through at least Wednesday an Alert Day for the West of Thoreau area due to low linepack, but Kern River linepack was returning to suitably normal levels, which allowed downstream LDC Southwest Gas to end an OFO as scheduled Wednesday.
IntercontinentalExchange (ICE) noted that while Algonquin citygates plunged nearly another 65 cents Wednesday following Tuesday's 29-cent dive, volumes traded on its online platform rose from 151,200 MMBtu to 172,900 MMBtu Wednesday.
Despite Tennessee's 500 Line and 800 Line pools in the Gulf Coast both being down a little less than a nickel, ICE recorded a trading activity gain from 381,800 MMBtu Monday to 475,200 MMBtu Tuesday for the 500 Line but said 800 Line volumes dropped from 292,000 MMBtu to 209,700 MMBtu.
Despite the industry being a month into the traditional storage withdrawal season, Southern Natural Gas reported that of its total system working gas capacity of 60 Bcf, on Thanksgiving Day inventory stood at 51.1 Bcf, or 95%. What made that somewhat remarkable is a week earlier Southern had said stocks were down to 55.8 Bcf (93%) on Nov.18. The volume rebound likely was facilitated by the relatively moderate weather experienced by much of the pipeline's Deep South market area in the last half of November.
Comparable recent-year numbers for the most recent Southern storage level are 58.5 Bcf (98%) on Nov. 26, 2009 and 52.2 Bcf (87%) on Nov. 27, 2008.
A Texas-based marketer reported seeing little remaining December baseload trading either Monday or Tuesday. It may be getting warmer in the Northeast, he said, but he still expects wider basis spreads and slightly firmer prices Wednesday. The pipe restriction situation is quiet, he noted, which indicates that the supply-demand balance is pretty well under control.
The market is not quite yet in a "holiday syndrome" trading mode, the marketer said, because first there are the usual first-of-month chores to be taken care of.
A Midcontinent producer said a cold front moved through at midday Monday, but a fairly mild weekend was in store. Regional spot prices are certainly above anticipated first-of-month December indexes, he said. He thinks cash will be mostly firmer for the first week of the month, but then check the eight- to 14-day forecasts to look further into the price future.
A Midwest market found it odd that after MichCon citygates had commanded an often-significant premium over their Consumers Energy counterparts for much of this year, the situation had reversed overnight. Whereas MichCon's average of $4.53 Monday was a nickel above Consumers, on Tuesday Consumers led MichCon by about 4 cents ($4.40 to $4.36) Tuesday.
In a weak closeout of the official 2010 Atlantic hurricane season Tuesday, the National Hurricane Center (NHC) said it was monitoring a broad low-pressure area over the extreme southwestern Caribbean Sea just north of Panama. NHC said the system was likely to spread westward into lower Central America and had only a 10% chance of becoming a tropical cyclone during the next 48 hours.
Stephen Smith of Stephen Smith Energy Associates said he previously was expecting a storage pull of 35 Bcf for the week ending Nov. 26 but as of Tuesday had lowered his estimate to 28 Bcf. IAF Advisors analyst Kyle Cooper and Ron Denhardt of Strategic Energy & Economic Research look for similar withdrawals of 29 Bcf and 27 Bcf, respectively.
Citi Futures Perspective's Tim Evans anticipates a significantly larger subtraction of 40 Bcf in Thursday's report. Looking further ahead, Evans projected withdrawals of 108 Bcf, 134 Bcf and 131 Bcf in the weeks ending Dec. 3, Dec. 10 and Dec. 17, respectively.
Most of the 23 trading points covered by Bentek Energy's U.S. Natural Gas Hub Flows chart showed little change in nominated volumes from Monday to Tuesday. The Chicago citygate was a major exception, rising 730,000 MMBtu to 3,088,000 MMBtu, followed by a 16% Sumas increase of 123,000 MMBtu to 902,000 MMBtu. Texas Eastern M-3 led volume drops in falling 878,000 MMBtu to 2,949,000 MMBtu (23%). Otherwise nominations movement was 10% or less either up or down.
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