In terms of volatility, the cash market came to a near-standstill Wednesday as gains and losses were approximately even and only a few locations ventured more than a nickel in either direction.
Cold weather in the West that was gradually spreading eastward, along with the belief that some traders are continuing to replace storage used during the recent two-week freeze, were chiefly responsible for a good chunk of the market failing to rejoin the softening ranks. The previous day's uptick of 5.1 cents by March futures also provided some cash support.
However, outside the western U.S. and much of Canada, relatively moderate conditions in most sections translated into a big reduction of heating load from the recent past.
Flat performances were common amid increases that ran as high as a little more than a dime, while declines were measured down to about 30 cents, with all of the larger losses occurring in the Northeast where a winter storm at the beginning of the week had moved out to sea by Tuesday and left a moderating trend in its wake.
The screen has again abandoned positive guidance for the cash market Thursday after giving back more Wednesday (5.5 cents) than it got on Tuesday (see related story).
Continuing below-zero lows in Alberta caused NOVA Inventory Transfer numbers to repeat with one of the day's largest gains of about a dime. Although the Rockies were not nearly that cold, the region was starting to experience slightly below-freezing lows again, while the West Coast ranged from chilly to cold.
Meanwhile, highs in the South were continuing to peak a little above 70 each day, while conditions remained fairly cold in the Midwest and Northeast but stayed above freezing for the most part.
With PG&E declaring a systemwide low-inventory OFO (see Transportation Notes), PG&E citygate prices rose about a nickel on the IntercontinentalExchange (ICE) platform while trading volumes increased from 1,013,300 MMBtu Tuesday to 1,099,400 MMBtu Wednesday, ICE said.
Only the Southern California border and PG&E citygate saw major increases -- up 305,000 MMBtu to 3,305,000 MMBtu (10%) and 207,000 MMBtu to 3,040,000 MMBtu (8%), respectively -- in volumes nominated for Wednesday's gas day, according to Bentek Energy's U.S. Natural Gas Hub Flows chart. Three other trading points of the 23 covered in the Bentek chart realized only small gains. Losses were highly dominant in Wednesday flows, led by the Chicago citygate (down 825,000 MMBtu to 2,082,000 MMBtu, or 28%) and Texas Eastern M-3 (down 674,000 MMBtu to 3,890,000 MMBtu, or 15%), Bentek said.
A Southern utility buyer said it felt good to be "thawed out" again when local businesses and schools had been closing due to heavy snowfall only a week earlier. Heating demand has fallen quite a ways this week, so the pace of company activity is a bit slower, he said.
The buyer said his utility will be reinjecting storage next week into one pipe account that is used for system balancing, but it will leave the account on another pipe alone if possible. He thinks his area likely will be able to get near the end of February before any severe cold returns.
Some snowbanks are still not melted, a Midwest marketer said, and local temperatures could drop to a little below freezing at night this weekend. At least the situation will be easier to endure than that of the previous two weeks.
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