Natural gas cash prices overall fell 4 cents in Wednesday’s trading as strength at eastern and northeast points was unable to offset slumping quotes at major market hubs and West Coast locations. Losses were widespread and only a few points managed to make it onto the positive side of the trading ledger. At the close of futures trading, May had fallen 7.2 cents to $4.166 and June was down 7.5 cents to $4.203. June crude oil added $2.25 to $91.43/bbl.

Next-day prices were firm to higher at Northeast and eastern points as a cold front was forecast to slide through the area. The National Weather Service in New York City said “a cold front moves across the area” Wednesday. “High pressure builds in through the end of the week and will persist into the middle of next week.”

Temperatures were expected to stay above normal. Forecaster predicted New York City’s Wednesday high of 73 would fall to 66 Thursday, two degrees above normal. Boston’s high Wednesday of 66 was anticipated to slide to 63 Thursday, well above the seasonal norm of 59.

Eastern next-day power prices provided a footing for higher gas quotes. IntercontinentalExchange reported that next-day peak power into the New England Power Pool’s Massachusetts Hub rose $1.70 to $46.62/MWh, and peak next-day power delivered to the PJM West Hub rose 87 cents to $46.17/MWh. At the New York Independent System Operator’s Zone A (western New York), market point power for delivery Thursday fell $3.30 to $36.95/MWh.

Next-day gas at the Algonquin Citygates rose 12 cents to $5.16 and on Tennessee Zone 6 200 L gas for Thursday delivery added 4 cents also to $4.99. Farther upstream at Iroquois Waddington packages were seen at $5.04, down 2 cents.

Gas deliveries to Dominion Thursday added 2 cents to $4.28, and on Tetco M-3 gas was quoted at $4.47, 2 pennies higher. Gas headed for New York City on Transco Zone 6 rose 2 cents to $4.49.

Quotes at California points continued their pattern of SoCal Citygate prices trading above PG&E Citygate, and the region may be looking at the biggest regional power shortages this summer in more than a decade. A combination of the idled San Onofre Nuclear Generating Station (SONGS) nuclear reactors and low hydro supplies could send term gas and power quotes sharply higher. Natural gas may be called upon to take up the slack.

NGI in March reported that the California Independent System Operator said managing the state grid, especially in parts of Southern California, will prove “difficult” because the system will be operating without SONGS, as well as two natural gas-fired units, while hydroelectric output will be at a three-year low (see Daily GPI, March 26). The nuclear plant, California’s single largest source of baseload power, accounts for 3.7% of the state’s capacity.

The Northwest River Forecast Center Tuesday forecast reduced flows for the crucial April-September period at a pivotal monitoring spot. It said flows at the Dalles Dam would average 88,539 KAF (thousand acre-feet), 96% of the 30-year average for the period. Farther north flows are expected to be slightly above normal. At Grand Coulee, April-September flows are projected to average 62,199 KAF of 103% of average.

Next-day gas prices reflect the growing demand for power at Southern California points. Next-day quotes at PG&E Citygates were unchanged at $4.31, but SoCal Citygate gas seen at $4.37, down 4 cents. Malin packages were $4.10, 8 cents lower and SoCal Border was quoted at $4.24, 4 cents lower. Deliveries on El Paso S Mainline came in at $4.28, 2 cents lower as well.

Analysts see natural gas providing relief. “California may see the biggest test since Enron manipulated the market,” said consultant Stephen Schork of the Schork Group. “If you have a reactor down and you don’t have as much hydro, your fuel for air conditioning is going to have to come from gas.”

Prices at major market hubs eased. At the Henry Hub, next-day deliveries fell 2 cents to $4.25 and at the Chicago Citygates Thursday packages were seen at $4.42, 4 cents lower. At Opal, Thursday gas was off 7 cents at $4.08.

Futures were doing fine Tuesday prior to mid-session weather updates. At that point, the May contract started a slide to close at the low end of the day’s range. The “midday weather update was somewhat less supportive than earlier runs, and the nearby May futures tipped back to close 2.9 cents lower on the day,” said Tim Evans of Citi Futures Perspective. “To some extent, the market is probably also marking time ahead” of the Energy Information Administration’s gas storage report. The “estimates we’ve seen so far bracket last week’s 31 Bcf net injection, a supportive figure compared with the 50 Bcf five-year average for the date.”

Evans’ model predicts a 19 Bcf build. “Thus we see some risk of a bullish storage surprise. The current week is somewhat cooler still, and so we see a slightly smaller 15 Bcf build for the week ending April 26 before temperatures moderate to more seasonal levels,” he said. He sees the expanding year-on-five-year deficit remaining “supportive, but it looks as though the cool temperatures and corresponding storage trend may be coming to an end.”

Estimates were tightly bunched for the closely watched report, which is to be released at 10:30 a.m. EDT Thursday. A Reuters survey of 23 traders and analysts showed an average 32 Bcf injection with a range of 19 Bcf to 40 Bcf. IAF Advisors of Houston calculates a 34 Bcf build, and industry consultant Bentek Energy is looking for an increase of 30 Bcf utilizing its flow model algorithms. Last year 43 Bcf was injected.

WSI Corp. in its Wednesday morning 11- to 15-day outlook said the day’s “forecast continues to trend colder over portions of the Southeast when compared to the previous forecasts. Temperatures in the Northwest are also a touch colder…”

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