Wednesday's cash market was quite a bit weaker than Tuesday's; triple-digit declines continued at several Northeast citygates, but they were joined this time with falling numbers almost everywhere else as end-of-the-year weather forecasts were getting considerably milder.
Only a flat Transco Zone 5 escaped price drops ranging from just shy of a dime to a little more than $2.65. All of the biggest losses occurred in the Northeast, where low temperatures and some snowfall would remain through Thursday, but the worst effects of a recent winter storm will be starting to dissipate.
A dip of 17.8 cents in January futures Tuesday obviously had a bearish effect on cash numbers; however, Nymex's prompt-month contract managed to rebound by 9.3 cents Wednesday (see related story).
The National Weather Service's six- to 10-day forecast for the period leading up into New Year's Day shows a mostly above-normal central third of the U.S., with only moderately below-normal readings projected along the West Coast and from the southern end of the Northeast through all of Florida on the East Coast.
More immediately, the start of winter is behaving a bit more mildly than in the couple of weeks leading up to it. Lows in the teens and 20s are still being predicted from the Rockies through the Midwest and the Northeast, but generally they are about what is usually expected in the year-end holiday period. The southern tier of states from Florida through most of California has fairly mild forecasts in the next couple of days or so.
There were no significant cold weather-related pipeline constraints still in effect as of Wednesday.
IntercontinentalExchange, which saw the Texas Eastern M-3 price average slide about $2 on its online trading platform, said M-3 volumes fell from 411,400 MMBtu Tuesday to 322,200 MMBtu Wednesday. On the other hand, ICE said, Henry Hub only dropped about 15 cents, but its trading activity soared from 767,600 MMBtu to 937,700 MMBtu.
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