Price stagnancy is likely to be short-lived as a return to frigid temperatures is anticipated in most areas during weekend.
Northeast citygates were falling back from the $10-plus heights that some of them had reached earlier in the week, while the rest of the cash market remained largely static with small changes to either side of flat Thursday. Higher prices were expected as soon as Friday, however, as forecasts indicated frigid conditions returning -- mostly in the populous eastern half of the U.S. -- by the end of the week.
The Florida citygate took the biggest price hit of more than $5 as Florida Gas Transmission ended an Overage Alert Day (see Transportation Notes) that had been prompted by previously sub-freezing lows in much of the Sunshine State. Losses in the Northeast, where a gradual warming trend is also under way, ranged from about $1.05 to nearly $2.35. Otherwise, near-flat numbers continued to prevail.
The Energy Information Administration's report of an 89 Bcf withdrawal from storage was a little higher than consensus expectations in the mid 80s Bcf, but Nymex traders at first didn't seem to know what to make of it (see related story). They apparently got into a bearish mood later as prompt-month futures eventually ended the day 17.1 cents lower.
Reflecting a slightly milder weather trend in the South, both Southern and Florida Gas Transmission ended restrictions to guard against negative imbalances Thursday (see Transportation Notes).
Despite the current respite from severe cold in several areas, keep the heavy overcoats handy. Returns to sub-freezing lows, and even temperatures below zero in some locations, are due over the weekend for much of the U.S. and Canada.
Northern Natural Gas said Thursday it had revised its projection of a Saturday system weighted temperature to slightly lower -- down a degree to 7 -- but expected the market-area average to plunge to minus 2 for Sunday.
The National Weather Service's (NWS) forecast for mid-December calls for continuing below-normal temperatures everywhere east of a line roughly paralleling and slightly eastward from the Mississippi River. The largest deviations below normal were predicted for the Atlantic Coast states from Florida northward through the New York City area. The agency looked for above-normal readings in most of the southwestern third of the U.S. However, in its eight- to 14-day forecast posted Wednesday afternoon, NWS said it expects the below-normal area to have receded modestly eastward, and the much-below-normal expectations to have shrunk into the coastal Mid-Atlantic area.
Noting the Northern Natural forecast of a minus 2 market-area average Sunday, a Midwest utility buyer joked that it "must be getting really cold in Minneapolis." More seriously, he noted that the region's current slight warming trend was "just temporary," with much colder conditions expected next week. The utility's gas throughput is sagging slightly for now, he said, but should be very strong again around Sunday.
Columbia Gas prices may have dropped about a penny on the IntercontinentalExchange (ICE) trading platform, but transaction volumes skyrocketed from 699,500 MMBtu Wednesday to 905,500 MMBtu Thursday, ICE said. On the other hand, it reported, while Chicago citygates rose nearly 3 cents, ICE activity slipped from 1,083,300 MMBtu to 971,500 MMBtu.
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