Prices were higher in all of the cash market Wednesday, driven primarily by stubborn wintry weather across Canada and much of the northern U.S. -- even though the seasons officially transitioned into spring last Sunday -- and secondarily by the previous day's advance of 9.3 cents by April futures. And as a producer had suggested Tuesday, storage buying for price arbitrage opportunities (and maybe by some traders who just wanted to get a jump on the traditional injection season) likely helped boost demand further.
A large majority of gains were in double digits as they ranged from only a couple of cents each at the three Western Canada trading locations and related Kingsgate to nearly 80 cents. As usual Northeast citygates cornered the market, so to speak, on the largest upticks, and New England locations tended to lead the regional increases.
Cash quotes will continue to have fairly strong screen support Thursday after prompt-month futures tacked on a further gain of 8.1 cents (see related story).
Pipeline restrictions into the storm-blitzed Northeast were growing, with Tennessee declaring a market-area Imbalance Warning (see Transportation Notes) and Texas Eastern joining affiliate Algonquin in sealing off certain points to additional nominations and encouraging positive imbalances by shippers.
In a release posted Wednesday and titled "Snow on Top of Snow in the Northeast," AccuWeather.com said, "As if the [existing] six to 12 inches of snow was not enough for portions of New York and Pennsylvania, more snow is coming from the same storm system." Noting the potential for an additional six-12 inches of snow in part of "this rather narrow corridor," the forecasting service added, "Essentially, if you got snow Wednesday morning, you could double what you have on the ground by Thursday morning."
Frigid conditions are persisting in the Upper Midwest and have started to spread in the lower section of the region, which up until Wednesday had largely managed to avoid subfreezing lows. While still relatively mild, dropping temperatures Thursday in much of the South -- generally east of the Mississippi River -- will provide an advance sign of the chill that will be descending from the North toward the weekend. However, Louisiana and Texas can expect to stay on the warm side a bit longer.
Cool is the dominant weather condition in most of the western U.S.; even though overnight lows will still hit freezing or lower in the Rockies, peak daytime temperatures will run as high as about 60 in Denver.
Quotes rose about a dime into Kern River, which said low linepack problems on Monday and Tuesday had been resolved.
CIG saw its first $4 or higher average since the trade date of Feb. 9, while the CIG-Henry Hub basis spread remained in the area of 16 cents.
Nicor Gas ended restrictions on deliveries into its system (see Transportation Notes). Chicago citygates were up nearly 20 cents, according to IntercontinentalExchange (ICE), although ICE-traded volumes at the citygate fell substantially from 786,300 MMBtu Tuesday to 600,300 MMBtu Wednesday.
The PG&E citygates rose by more than a nickel, but ICE said the volumes there on its platform dropped significantly from 1,167,000 MMBtu to 856,900 MMBtu.
The National Weather Service predicts below-normal temperatures throughout the eastern half of the U.S. during the March 29-April 2 period, with the greatest deviation from normal due in the lower Northeast.
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