Although much of the market continued to stagnate with quotes that were either flat or close to it both higher and lower, it was up, up and away again Wednesday for delivered numbers in the Northeast/Mid-Atlantic and Florida.
Texas Eastern M-3's spike of about $3.45 led a parade of triple-digit increases in the Northeast/Mid-Atlantic, despite Transco Zone 5 recording the day's top price of about $11.55. Dracut brought up the rear of those mammoth gains by rising about $1.40. The Florida citygate rise slowed down a bit but was still strong at a little more than a dollar.
However, the Florida Gas Zone 3 increase of about 15 cents was the only movement greater than about a nickel up or down from flat in the rest of the market as modest warming trends were due for at least a day or two in some regions.
Wednesday's cash market had negative prior-day futures guidance from a January contract that fell 9.5 cents, but can count on strong screen support for Thursday after the contract rebounded by 21.3 cents (see related story).
The Midwest will remain a few degrees colder in general than the Northeast through Thursday, but small Midwest price movement was in sharp contrast to the skyrocketing quotes to the east. One source suggested that the greater abundance of Midwest storage, plus fewer transport restrictions, were largely responsible for the regional price variances.
PG&E is ending a high-inventory OFO Thursday, while MRT will do the same with a System Protection Warning to guard against linepack shortfalls (see Transportation Notes). However, Florida Gas Transmission (FGT) kept an Overage Alert Day in effect through at least Wednesday, maintaining the negative imbalance tolerance at 15%.
Although Northern Natural Gas expected to return to the vicinity of its normal system weighted temperature of 23 degrees at this time of year with Upper Midwest market-area averages of 26 Thursday and 22 Friday, a bulletin board posting projected a plunge to the icy depths of only eight Saturday.
Although Transco Zone 5 (non-WGL) scored the top quote of $11.50 on IntercontinentalExchange's (ICE) platform, trading volumes there slipped from 13,0,200 MMBtu Tuesday to 122,500 MMBtu Wednesday, ICE said. Transco's non-New York Zone 6 pool was close behind in bidding for the day's top ICE price, and although its volumes slipped a little less than 6,000 MMBtu to 129,300 MMBtu, the point recorded the biggest overall increase of about $2.85.
An explosion and fire Wednesday at a processing plant on the OG&E system in south-central Oklahoma caused no injuries or supply disruptions, according to a report by Reuters news service. A call to OG&E for an update was not returned to NGI.
The plant outage likely will back up gas on OGT even worse than it already is, but the incident itself was "no biggie," said a Midcontinent producer. Gas was still plentiful on OGT Wednesday, he noted.
Saying the market remains well supplied, the producer added that it was hard to understand why prices weren't buckling under full pipes and overall moderating weather trends.
Florida citygates got as high as $11, said a trader in the Sunshine State, but forecasts were for a warm-up in the next day or two before freezing weather returns to Florida. FGT is performing work on its in-state West Lateral, limiting ability to get gas into the market area, she said. Normally that's not a problem because such severe cold is fairly rare in December, but that's not the case now, she said.
Those with the pipe capacity to be able to deliver in the market area are doing fairly well while production-area numbers see little movement, the trader continued. It's more profitable to have gas downstream of a bottleneck rather than upstream, so those who can deliver downstream of the bottleneck can pretty much charge whatever the market will bear, she pointed out.
The kind of weather currently prevailing isn't why coming to Florida during the winter is so popular with Northeast residents, she said.
Bentek Energy's U.S. Natural Gas Hub Flows chart showed about an even division among volume changes up or down in gas nominated for Wednesday flow at 23 trading points. But the overall trend was lower as declining numbers tended to be bigger than those flat to higher. Niagara recorded the only double-digit percentage increase of 25%, but its volume gain of 64,000 MMBtu to 325,000 MMBtu was relatively light. On the other hand, Bentek reported drops of 173,000 MMBtu to 604,000 MMBtu (22%) for NGPL-TexOk; 221,000 MMBtu to 1,050,000 MMBtu (17%) for Northern Natural-Ventura; 639,000 MMBtu to 4,000,000 MMBtu (14%) for Texas Eastern M-3; and 127,000 MMBtu to 832,000 MMBtu (13%) for ANR-Louisiana.
©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.