Prices rose at nearly all points Tuesday as a cold snap continued in much of North America. The exceptions were major retreats at four Northeast citygates following regional spikes the day before.
Transco’s Zone 6 New York City pool, where a low of 25 degrees was forecast for Wednesday, continued to soar by about $1.50, but it was barely edged out for the day’s high average by Iroquois Zone 2 despite a drop of nearly 75 cents by that point. Although Zone 6-NYC’s top quote of $18.25 Tuesday was far short of the $22.75 peak recorded Monday, its average was much higher Tuesday. But the Algonquin citygate took over the top-price title by peaking at $18.50
Other than the big surge in New York City numbers, other gains were more modest in ranging from about a nickel to a little more than 70 cents. The biggest of those increases were in the Rockies, where temperatures are forecast to fall by 10-15 degrees Wednesday.
Northeast temperatures Wednesday will be substantially below average for early December with highs ranging from the 20s to the 50s, north to south, according to The Weather Channel. Snow and freezing conditions will remain in effect across much of Canada and the northern half of the U.S. The South and Southwest are still relatively mild for the most part with highs predicted in the 60s and 70s. Texas is warming a bit after an overnight freeze dipped as far south as the Houston area early Tuesday.
Wednesday’s cash market will have moderately negative screen guidance after January futures fell another 5.9 cents Tuesday.
One factor pushing Northeast price averages into four digits Monday and Tuesday was an outage of the Sable Offshore Energy Project (SOEP) that occurred over the weekend due to a heat exchanger equipment problem, a spokesman said. There is no estimated time for resuming production at this point, he added Tuesday afternoon, but recent output has been in the 450-480 MMcf/d range.
Maritimes & Northeast Pipeline remains fully operational, a spokeswoman said, but volumes flowing into upper New England are being curtailed as a result of the SOEP outage.
Due to a winter storm heading for the Mid-Atlantic, Columbia Gas declared Wednesday a “Critical Day” in eastern market areas (see Transportation Notes). No nonfirm capacity will be available in those areas.
A marketer said he assumed that some Northeast citygates, especially Algonquin, plunged Tuesday because some of the lost SOEP supply was being replaced by other sources. He reported hearing that a Northeastern facility with dual-fuel capability had switched to burning fuel oil Monday because $12 was its operator’s limit on delivered gas prices. He thought softness would return to the market Thursday with a modest northern warm-up starting to develop.
Noting that Chicago’s first-of-month index soared by 52 cents while the Michigan citygates were up or down about a nickel, the marketer explained that most Chicago business gets done on the first day of bidweek, when prices were highest this time. Michigan deliveries continued to trade through midweek, subjecting them more to the effect of weakening futures on December baseload, he said.
The National Weather Service expects below-normal temperatures during the Dec. 10-14 workweek in upper New England and everywhere north and west of a line arcing northeastward from the southwest corner of New Mexico into southern Minnesota below turning east to include the northern two-thirds of Wisconsin and Michigan. The agency predicted above-normal conditions throughout the South as far west as central Texas and in the Mid-Atlantic and southern Midwest.
Strategic Energy & Economic Research analyst Ron Denhardt expects a storage withdrawal of 83 Bcf to be reported for the week ending Nov. 30. Projecting even further out, Citigroup’s Tim Evan looks for pulls of 75 Bcf, 105 Bcf and 85 Bcf in the weeks ending Nov. 30, Dec. 7 and Dec. 14, respectively.
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