Frigid temperatures and frozen precipitation extending into nearly all sections of the U.S. and Canada caused spot prices to rise at all locations except three in Western Canada Wednesday.
Spikes around a dollar or more were frequent in the Northeast, where high temperature forecasts for Thursday were falling back to the freezing area or lower, and in the Midcontinent and West, where frigid conditions and supply shortfalls combined for a one-two punch on some pipeline operations.
OFOs and similar actions to combat low linepack that were suspected of being caused by frozen wellheads in some cases were proliferating at a rapid pace (see Transportation Notes). Linepack shortfalls were being encountered most often on western pipes.
Price gains tended to be smallest in the Gulf Coast, Appalachia and a few locations in the lower Midcontinent and West amid an overall advance ranging from about a nickel to nearly $2.45. Empress, NOVA Inventory Transfer and Westcoast Station 2 were the exceptions with declines of about C5-10 cents despite Westcoast and NOVA both experiencing low linepack.
Cash traders will return to having prior-day screen support Thursday after March futures rallied by 8.2 cents Wednesday (see related story).
The Oklahoma intrastate market was one of the strongest, with quotes topping out at $8 on OGT and the average price jumping a little more than $1.50.
Despite fairly large price gains in most cases, IntercontinentalExchange (ICE) saw few dramatic volume changes in activity on its online trading platform. For instance, although slightly warmer the Chicago area would get no higher than about 5 degrees Thursday and the average citygate price rose nearly 40 cents, yet ICE reported a volume increase of only 58,900 MMBtu to 1,267,100 MMBtu Wednesday.
Pipes issuing OFOs or taking other actions to control low linepack included Northern Natural, Transwestern, MRT, El Paso, Panhandle Eastern, NOVA and Westcoast. Northern, which had reported losing some supplies at plant tailgates Tuesday due to weather-related factors, along with El Paso and Gulf South acknowledged that they might experience shortfalls due to frozen wellheads or other types of equipment.
El Paso Corp. spokesman Richard Wheatley said the company was experiencing increased load on all of its western systems but managing to serve all firm demand. Although El Paso reported "underperformance" at receipt points in the Permian and San Juan basins, the pipeline could not definitively link that to frozen wellheads, Wheatley said.
As of late Wednesday afternoon the only parts of the U.S. showing any tendency toward merely chilly conditions were along the South Atlantic coast and in much of Northern California, according to a map by The Weather Channel.
Some light was seen at the end of the storm tunnel. Punxsutawney Phil, the Pennsylvania groundhog, was reported to have not seen his shadow Wednesday morning, which supposedly means spring weather will be arriving soon (not nearly soon enough for many people after an often-frigid November-January period). In recent years Phil mostly saw his shadow, indicating an additional six weeks of winter.
More concretely, Northern Natural's bulletin board showed that while its system average of 2 degrees Wednesday was well below the normal weighted temperature of 18 at this time of year, the average would get closer to the norm by rising to 13 Thursday and then surpassing it at 24 Friday and 25 Saturday.
And Kern River indicated that temperatures will be moderating significantly Thursday and Friday at several key locations on its system, including the Opal Plant area in Wyoming.
Kyle Cooper of IAF Advisors estimates a 188 Bcf storage withdrawal for the week ending Jan. 28.
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