Triple-digit spikes returned to most Northeast citygates as significantly colder conditions were anticipated for Sunday and Monday, but in the rest of the cash market it was even greater softness Friday than before as the previous day's 17.4-cent drop by prompt-month futures, the industrial demand loss experienced over a weekend, and cool to merely chilly temperatures being dominant from the western end of the South through much of California contributed to an overall bearish mood.
Most points recorded declines ranging from a little less than a dime to the 35-cent area; they tended to be close to uniform across geographic market areas. The big difference was in the Northeast; although Dracut joined the rest of the market with a small decline, other Northeast points rose by about 15 cents to a little more than $2. Transco Zone 6's New York pool again led the firmness with both the top absolute quote ($14) and highest average (about $12.50).
Nymex acceded a small amount of support for Monday's cash market in rebounding by 1.3 cents (see related story).
Although Saturday temperatures in the Northeast were generally predicted as static or a bit warmer, The Weather Channel said a potential Nor'easter coastal storm could be bringing snow and high winds from North Carolina to Maine from late Saturday through Monday. So although the Saturday forecast was somewhat deceptive in indicating regional heating load, the colder weather due by Sunday was largely responsible for driving citygates much higher.
The Kern River bulletin indicated warming trends through at least Sunday at key western markets in Salt Lake City, Las Vegas, Denver, Los Angeles and Sacramento, CA.
It was getting cold overnight in much of the South, a Gulf Coast trader said, but that was offset to some extent by relatively mild afternoons. She had no problems selling gas in the Gulf Coast, though; there may not be much localized demand in the region, she said, but she thinks a lot of the gas that her company was selling lately was being taken by the buyers into the Midwest and/or Northeast.
The trader was getting an early start on next-month deals by doing "a little" at index Friday. She expects most January trading to get finished by next Thursday, noting that many traders like to take off the week between Christmas and New Year's for family activities. There's a good chance that any new bidweek deals after Christmas might be fairly scarce, she said.
Although it was slacking off a bit going into the weekend, a Midwest marketer noted seeing a large amount of heating demand earlier in the week.
There were no significant problems with Northern Natural's System Overrun Limitations (SOL) effective Saturday through Monday, the marketer said. He thinks the pipeline is issuing fewer SOLs these days despite December being colder than previous ones. He explained that's probably because with Marcellus Shale production displacing some Canadian exports to the U.S. Northeast, Northern is getting more supplies than before from north of the border. Northern Border is running full and able to charge maximum rates.
A few more freezing days are coming up again in the coming week, he said, but the worst of the most recent cold blast appeared to have passed. That's not so good in a way, he added, because it means company sales are down a little.
He agreed with the Gulf Coast source that a great deal of January baseload transactions will be finished on Monday, Tuesday and Wednesday of this week. Some of his coworkers would already be on vacation then, he said, and even more, along with those at other companies, will be joining them in the week leading up to New Year's Day.
The Baker Hughes Rotary Rig Count found seven rigs had left the U.S. pursuit of natural gas during the week ending Dec. 17, bringing the remaining total down to 941. One Gulf of Mexico rig joined six onshore rigs in the departures. Despite the drop, for a change the latest Baker Hughes tally was positive in comparison to the previous month (up 1%) and to the year-ago level (up 22%).
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