Chilly temperatures kept upward pressure on a vast majority of cash point averages on Tuesday except for a handful of Northeast points, which recorded drops of $2.20 to more than $5 as the coldest temperatures associated with Sunday's blizzard began to subside.
Prices from the Midcontinent down through the Gulf Coast and out through the West mostly posted increases of a few pennies to approximately a dime. A number of cash market participants agreed that the daily activity was muted in most locations, while bidweek deals were starting to ramp up.
"Daily prices are quiet. Not really much to talk about there, said a Midcontinent marketer. "As far as bidweek, prices were surprisingly strong considering the forecasts for moderating weather in January."
He told NGI that Chicago basis for January was trading plus-22-25. Without any other tangible reason for the strength, the trader suggested that Chicago prices were driven up by very strong Northeast delivered market pricing.
"The Chicago market does not really compete with Northeast LDCs for supply directly, but it does compete by displacement and with basis prices in the Northeast $4 dollars or more, every molecule that can flow there is flowing there," he said.
Prices for Northeast delivery may have experienced some relief on Tuesday, but curtailments on pipelines serving that area by and large did not. Although all of the major pipelines serving New England continue to operate without any operational flow orders (OFO), several did add to the list of curtailments at constrained points.
Algonquin Gas Transmission once again restricted flow from its Stony Point and Cromwell compressor stations on Tuesday, and it added Burrillville compressor station to that list. Tennessee Gas Pipeline added restrictions at Stations 341, 355, and its Rivervale Delivery Meter, to go along with the restrictions it had in place at Stations 245 and 325 on Monday.
Williams on Tuesday noted that it has detected a cavern leak at its Eminence storage facility in Mississippi (see related story). While an evacuation was conducted, gas supplies on its Transcontinental Gas Pipe Line (Transco) were not affected, the company said.
Transco also issued a critical notice on Monday that will be in effect for the rest of the heating season (through March 27). The pipeline "strongly encourages all shippers to manage their system requirements to ensure a concurrent balance of receipts and deliveries. Furthermore, it is strongly suggested that no 'due from shipper' (short on the pipe) imbalances be created."
Absent voluntary compliance on the part of its shippers, the pipeline warned that it may have to take further action as allowed by its tariff. If such action is required, Transco further warned that "little or no additional notice" would be available prior to the effective time of said action.
Another thing being debated heavily in trading circles was what kind of January is the country in for. A couple of weeks ago the long-range forecasts from private and government forecasters pointed to the brutal December cold letting up significantly in January. However, with January now less than a week away, that tune has changed a bit.
The National Weather Service's six- to 10-day and eight- to 14-day forecast updates on Tuesday both took significant turns to colder weather. In the latter forecast, almost the entire country is draped in below-normal temperature blue.
"If January turns out to be colder than first expected, it could throw a monkey wrench into peoples' withdrawal schedules," said Ed Kennedy, a broker with Hencorp Futures. "Be that as it may, there is no shortage of gas. I think the market is going to wait and see whether temperatures will be below normal in January before they react. Everyone that is trading natural gas right now is from Missouri -- the 'show-me' state."
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