The attack of very cold weather that gave a strong price-boosting start to the cash market as the week began lost quite a bit of its bullish influence Tuesday. Even the previous day's prompt-month futures gain of 13.9 cents and the lingering effect of widespread freezing lows were unable to keep cash numbers from mixed movement and staying close to either side of flat.
Modest firmness still prevailed as most points were flat to about 65 cents higher. As on Monday, the Florida citygate was a major outlier from the overall market with a spike of another $2.25 or so, with the top quote reaching an even $10. Otherwise the Northeast/Mid-Atlantic market garnered all of the double-digit gains of up to about 65 cents as bottom-end temperatures in the low to mid 20s would continue to pervade the region through Wednesday.
The Midcontinent/Midwest and Rockies/Pacific Northwest were home to a large majority of the losses ranging from 2-3 cents to about a dime.
In the early part of Monday's trading it appeared that January futures were prepared to offer prior-day support to cash numbers again Tuesday, but the contract later faded to a daily loss of 9.5 cents (see related story).
Although still pretty cold through Wednesday, the Northeast, Mid-Atlantic, South and Rockies can expect moderating trends to begin over the next couple of days. But Midwestern residents will continue having to tough it out for a while longer in fairly severe cold accompanied by snow in some areas.
Malin dropped about a nickel, but the PG&E citygate seemed to shrug off the utility's high-inventory OFO (see Transportation Notes) by staying flat. Meanwhile, continuing OFOs or similar actions by Southern and Florida Gas Transmission had relatively little impact on Gulf Coast prices other than to generate another spike in Florida delivered prices.
Columbia Gas volumes on IntercontinentalExchange (ICE) jumped from 647,700 MMBtu Monday to 801,600 MMBtu Tuesday as the price rose just shy of 30 cents, ICE said.
While she understood that milder conditions were in store along the Eastern Seaboard, a Midwest marketer said the forecast held no such relief for her region. There's a major storm possible this weekend, she said, when temperatures might get as low as nine degrees.
At least that was good for company business, the marketer said, because she was likely to have to keep buying extra heating load gas for customers. And another good thing was that the customers' strong demand was that it might be a positive economic news indicator to some extent, she added.
Stephen Smith of Stephen Smith Energy Associates said he had raised an original estimate of a 74 Bcf storage draw being reported for the week ending Dec. 3 to 85 Bcf. Strategic Energy & Economic Research's Ron Denhardt also is looking for a pull of 85 Bcf. IAF Advisors analyst Kyle Cooper expects it to be slightly larger at 86 Bcf.
Tim Evans of Citi Futures Perspective exceeds the other estimates handily in projecting a 108 Bcf withdrawal. Looking further ahead, he anticipates subtractions of 162 Bcf, 165 Bcf and 137 Bcf for the weeks ending Dec. 10, Dec. 17 and Dec. 24, respectively.
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