The cash market was flat to slightly lower outside of the Northeast as a winter storm started to leave the Northeast and Mid-Atlantic behind. Most trading points from New England through the Washington, DC, area were still recording spikes, while points out West were mostly flat.
Northeast citygates soared again generally by about $1.30 to a little more than $1.90. Some $10-plus quotes were showing up again in the area.
In the rest of the market, most points were flat with the exception of a few. The Florida citygate sported an uptick of nearly 20 cents, while Westcoast Station 2 scored one of the largest non-Northeast gains despite the pipeline having a systemwide high-linepack OFO in place.
With the storage injection report coming in at 174 Bcf, slightly above consensus expectations in the low 170s Bcf, February futures might have been expected to expire on a stronger note. Instead, Nymex traders apparently were in a bearish mood and sent the contract off the board 17.5 cents lower (see related story).
The storm left behind six to 18 inches of fresh snow from northern Virginia to Maine, with locally higher amounts in some parts of southern New England, The Weather Channel (TWC) said. It was not so surprising to see prices remain strong in that region as besides the heavy volumes of snow; lows in the teens were in the Friday forecast for such locations as Boston and New York City.
The Midwest would also stay pretty cold, but with lows rarely getting below the 20s or slightly higher. (However, late Thursday afternoon Northern Natural Gas said it would issue System Overrun Limitations in all market-area zones for both Sunday and Monday). It was a bit difficult to understand why prices were down only a little in the South as a thaw was beginning in the Tennessee Valley and sections along the Gulf Coast could expect highs in at least the 50s and 60s.
TWC said high pressure should keep the West dry and warmer than average for most locales.
Other than Westcoast issuing a high-linepack OFO (see Transportation Notes), there are virtually no significant pipeline service constraints left in effect.
The Southern California border was a location that had been softer Wednesday that joined the overall modest resurgence with a modest gain of a couple of pennies, IntercontinentalExchange (ICE) said. And ICE-traded volumes at the border slightly more than doubled from 219,300 MMBtu Wednesday to 443,200 MMBtu Thursday.
Pipe volumes appeared down Thursday. Bentek Energy's U.S. Natural Gas Hub Flows chart showed Texas Eastern M-3 and the Chicago citygate as seeing the biggest volumetric drops in nominations (at 319,000 MMBtu and 213,000 MMBtu, respectively), although percentage-wise they were down 7% each. Northern Natural-demarc recorded a larger percentage fall of 32%, although its volume dip was less at 198,000 MMBtu, Bentek said. The Florida citygate had the top volume uptick of 317,000 MMBtu, or 10%, on Thursday's Bentek chart.
A Midwest marketer said she bought bidweek gas at basis of plus 25 cents delivered to Consumers Energy and plus 26 cents at the MichCon citygate. She said she had noted a few days in recent weeks when Consumers Energy basis had been slightly above that of MichCon; until last year MichCon had regularly traded at a discount. Like much of last year when MichCon was at a premium, the marketer didn't see any obvious reason why they were now near parity.
She said her company had been cautious in buying a little more February baseload than might be needed.
As a producer indicated on Panhandle Eastern for Wednesday, bidweek prices have been trending lower. ICE reported that 360,000 MMBtu in February baseload changed hands Tuesday on its system at Houston Ship Channel for an average of $4.35. But about half that volume was traded Wednesday for about $4.29. Similarly, ICE said, Chicago citygates dropped from $4.66 to just above $4.60.
ICE reported Thursday that the bidweek weakness was continuing, with the Chicago citygate having dropped nearly another dime to the $4.51 area that day.
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